The Michigan House of Representatives voted against legislation to phase out the state’s income tax. House Bill 4001 was defeated a 55-52 vote, with several Republicans joining the Democrats to stop the measure.
The law would have reduced the state income tax from 4.25 percent in to 3.9 percent in 2018 – which would have cost the state $1.1 billion in year one, according to the Detroit Free Press. From there, the tax rate would have decreased by 0.1 percent for 39 years until it was gone.
State Rep Donna Lasinski, D-Scio Twp., said she voted against the measure after sharing details with constituents.
“Over the weekend and again last night, I shared HB 4001 with my constituents, including farmers, business owners and families. We can’t see how we can cut $700 million without any plan on where the cuts will come from, but still have the promised successful schools and the promised roads we need for our businesses to grow and our families to drive on safely,” Lasinski said. “We don’t see $700 million to cut from public safety. On behalf of my constituents, I voted no on HB 4001, in support of our promise to improve our roads, fund our schools and secure our infrastructure.”
Republican Gov. Rick Snyder was not supportive of the bill. He said he was disappointed that the House Tax Policy Committee approved the bill after a 90-minute meeting.
“This is an issue that requires thoughtful discussion with input from throughout the state. I hope the House will be more deliberate before taking a full vote. It's important that each representative has time to hear from their residents and allow them to weigh in before making a decision on a bill that will have statewide impacts for the next 40 years,” Snyder said in a statement. “"I'd reiterate I have serious concerns about this bill. Republicans in Michigan have made tough choices over the past six years that have led to a tremendous comeback. We are on a very positive path toward our future and we can't afford to take a wrong turn now."
Michigan’s income tax of 4.25 percent is higher than Indiana’s (3.3 percent) and Illinois’ (3.75 percent) but lower than Ohio’s (5 percent) and Wisconsin’s (7.65 percent), according to the tax foundation.