Politics & Government
10:15 am
Wed July 10, 2013

State lawmaker introduces plan to throw out state income tax

There’s a proposal in Lansing to throw out the state’s income tax. The bill would let voters decide whether to keep the tax or get rid of it.

Republican state Representative Bob Genetski (Allegan County) says he’s heard “a lot” of complaints from his constituents about having to pay state income taxes. That’s especially since the state stopped exempting pensions from the tax last year.

“Nobody likes any kind of tax,” Genetski reasons. “But the fact that people wake up each day and go to work and work real hard to try and provide for their families, and that the state somehow gets an automatic cut of that, is frustrating.”

Genetski’s bill doesn’t include a specific plan to replace the lost revenue. But he says he has an idea.

“I personally favor going more toward a consumption tax, which would obviously lead to a higher sales tax,” he elaborated.

Genetski says people should have to pay taxes on what they spend, not on what they earn.

Former director of the state House Fiscal Agency Mitch Bean says the plan would leave an $8.5 billion hole in next year’s state budget. He says the sales tax rate would have to be at least doubled to make up for the lost revenue.