Governor Rick Snyder and Republican leaders in the Legislature have struck a tentative bargain on tax reform and the state budget. The plan delays an October 1st income tax rollback and includes a compromise on taxing pensions.
Michigan is one of just a handful of states that does not tax pensions. The deal between Governor Snyder and GOP leaders would shield people 67 years old and older from a pension tax. The governor originally wanted to tax all pensions, but he says compromises were necessary. Governor Snyder:
“So it’s a transitional plan that I think addresses the shorter-term requirements while being structurally sound for the long term.”
The plan also calls for scrapping the complicated and unpopular Michigan Business Tax in favor of a corporate income tax. That’s part of an overall tax cut for most businesses to spur job creation.
The plan would eliminate the tax break for working poor families, but offer some new tax relief for low-income homeowners and renters.
The plan must still be approved by the House and the Senate.