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income tax

Ingham County

Michigan cities and towns are hurting for cash. Many have had to cut services like street and sidewalk repair. Some have had to reduce the size of their police and fire departments. 

The usual suspects of municipal finance woes—weak property tax revenues and rising employee retirement costs—share much of the blame.

But today there is another culprit: the state of Michigan itself.

Tax forms
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The city’s effort to get more eligible Detroit residents to file their earned income tax credit is paying off, city officials say.

More than 18,000 more residents filed for the federal and state earned income tax credits in 2016 than in 2015. Liza Howze is the city’s director of legislative affairs.

She says the increase is a result of a city-led effort to get more residents to take advantage of the credit.

IRS Form 1040.
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A question worth mulling over on this Tax Day: Does having to pay income taxes make you work harder? University of Michigan researchers have some new insight into the psychology of taxes, thanks to a new study.

sign that says flint
Steve Carmody / Michigan Radio

A major lawsuit over the Flint water crisis has been settled. Under the deal, the state will pay for the replacement of 18,000 lead service lines. This Week in Michigan Politics, Morning Edition host Doug Tribou and senior news analyst Jack Lessenberry talk about why the deal might set a precedent for other cities.

COURTESY OF MICHIGAN DEPT. OF TREASURY

Michigan’s chief economist, Jay Wortley, is retiring after 36 years of state government service. During that time, the state has faced the triplicate challenge of a declining population, deurbanization in its major cities, and a series of employment swings in the all-important auto industry.

As chief economist, one of Wortley’s primary responsibilities was to accurately estimate future tax revenues based on forecasts of economic growth and recessions.

State House Speaker Tom Leonard (R-DeWitt) is figuring out his next move after his income tax rollback tanked in the House last week. It was an embarrassing defeat largely the result of putting the bill up before the Speaker knew the votes were there. And he ran into a hard-dozen fellow Republicans who, along with all but one of the Democrats, torpedoed what was supposed to be a marquee moment in the early days of this session.

A photograph of the Michigan Capitol building
Steve Carmody / Michigan Radio file photo

First, Michigan Republican legislators proposed phasing out the income tax over a 40-year period, then that was changed to reduce it from 4.25% to 3.9% over four years. This week Michigan Speaker of the House Tom Leonard, R-DeWitt Township brought it up for a vote and in the wee hours of the morning on Thursday, it failed.

Lester Graham / Michigan Radio

There’s disarray among House Republicans in Lansing today.

The bill to cut Michigan’s personal income tax was defeated very early this morning.

There’s a battle over taxes emerging in Lansing.

Is it real? Or is it actually a proxy for other looming political fights?

Tax rollback

We could see action soon on a plan that would begin to rollback and eventually, after four decades, completely eliminate the state income tax.

But this idea from state House Republicans is getting the cold shoulder from Governor Rick Snyder, a lot of state Senate Republicans and, not to mention Democrats.

income tax
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A proposal to get rid of Michigan's income tax is quickly moving along in the Legislature. This Week in Review, Weekend Edition host Rebecca Kruth and senior news analyst Jack Lessenberry talk about whether the Republican-backed bill will go all the way.

They also discuss the action plan state House Republicans rolled out this week, the state Board of Education's call to hold off closing any schools this fall, and a planned set of bills to rectify the mess at the state Unemployment Insurance Agency. 

More than a dozen state senators have sponsored a bill that would eliminate Michigan's income tax by 2022.
Lester Graham / Michigan Radio

A survey commissioned by the Michigan League for Public Policy shows little public support for a recently introduced bill in the state Senate that would eventually eliminate Michigan’s state income tax.

Gilda Jacobs is a former Democratic state senator, and the CEO of the Michigan League for Public Policy, which advocates for social programs.

“I think that legislators really need to be very careful proposing this kind of legislation,” Jacobs said. “(Eliminating the income tax) really can have some devastating effects for the state in future years."

The Michigan State Capitol
Aunt owwee / Flickr - http://j.mp/1SPGCl0

Governor Snyder's proposed budget for Fiscal Year 2018 came out this week.

One thing it did not contain is a tax cut. That's something many Republican lawmakers want to push through.

One such lawmaker is Laura Cox, chair of the House Appropriations Committee and Republican Representative for the 19th District, representing Livonia. Cox joined Stateside to talk about what she would like to see changed with Michigan's tax policy. 

Mercedes Mejia / Michigan Radio

The Michigan Legislature is back in session, and the bills are rolling in. This Week in Review, Weekend Edition host Rebecca Kruth and Michigan Radio senior news analyst Jack Lessenberry look at a bill that would phase out the state income tax, and another that would end daylight saving time in Michigan.

They also discuss Education Secretary nominee Betsy Devos' rescheduled confirmation hearing, Detroit's newly elected school board, and Gov. Rick Snyder's upcoming State of the State address.

(Support trusted journalism like this in Michigan. Give what you can here.)

For a while yesterday, it looked as if we might have some hope of better things from Lansing.

New Speaker of the House Tom Leonard, R-DeWitt, seems to be a genuinely well-liked man, who has talked about reaching across party lines.

Aerial shot of Detroit
flickr user Barbara Eckstein / http://j.mp/1SPGCl0

Detroit officials say the city income tax is generating revenue and helping businesses.

Businesses in the city have a 2 percent income tax, while people who work there, even if they are not city residents or not, pay 2.4 percent.

As of last year, the state monitors Detroit's income tax returns.

John Naglick, the chief deputy chief financial officer and financial director for Detroit, said before the state began monitoring the tax returns, a lot of people didn't pay it.

Allan Cleaver / Flickr

A new report says the tax burden on Michigan businesses has declined slightly.

The Anderson Economic Group report ranks Michigan’s business tax burden 20th in the nation, improving from 21st last year.

Jason Horwitz is a senior AEG consultant. He expects the trend line will continue to go down in the coming years.

“When you look where taxes are so high for businesses in Michigan, the reason to be optimistic is that even though it’s been going down for five years, we would expect it to continue going down over the next few years,” says Horwitz.

Tax forms
flickr http://j.mp/1SPGCl0

Several Michigan universities are offering free tax help for low-income families.

Ron Draayer is with Davenport University and Volunteer Income Tax Assistance. He says the program is part of a greater effort to help people get their tax refunds.

Jim Townsend knows something about business.  He has an MBA from the University of Michigan, has been a brand manager for Ford Motor Company, and ran his own strategic marketing firm.

He also knows something about frustration.

John-Morgan / creative commons

One of Governor Snyder's first challenges of the New Year might come from his own party. There could be a push by Republican lawmakers to roll back the personal income tax rate.

Governor Snyder is gearing up to ask voters to approve a boost in the state's sales tax to pay for road repairs, so a call to cut individual income taxes might seem like a mixed message to some.

Detroit News Lansing Bureau reporter Chad Livengood joined us to talk about this. Listen to our conversation with him below.

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More than a dozen state senators have sponsored a bill that would eliminate Michigan's income tax by 2022.
Lester Graham / Michigan Radio

Governor Rick Snyder says Republican lawmakers should not be too quick to adopt tax cuts this year.

“I think people should work under that assumption, that it could be very difficult. And, first, let’s make sure we’re being fiscally responsible.”

Nevertheless, some incoming GOP lawmakers say they’d like to cut the state income tax.

There’s an old saying I know you’ve heard: “Nothing is certain except death and taxes.” Benjamin Franklin said that, by the way. He was a shrewd old cynic who I think would be much more at home in the world today than the other founding fathers.

And I’d also guess Old Ben wouldn’t be surprised to know that his death-and-taxes maxim was, like most things, only about half right. Death remains certain, even if we don’t know where or when. But there is very little certain about taxes.

Oh, we are certain to be taxed, in one form or another. Which is a good thing, if you like clean water, fire departments and schools.

But who pays and who should pay the taxes?

What we should be asking is: How high should taxes be? How do you set tax rates to give us the services we need and help the economy grow? To me, those are terribly important questions.Well, we now have some answers.

Lindsey Smith / Michigan Radio

A Kent County judge says Grand Rapids can ask voters in May to approve an income tax extension.

At issue is a temporary income tax hike that's set to expire in July 2015. The city wants to extend the tax an additional 15 years to pay for road improvements.

In an apparent attempt to pander to voters, the Michigan Legislature is rushing to pass an election year income tax cut. This is a little baffling, because the voters don’t want one.

The state has a budget surplus – on paper, anyway – of a little less than a billion dollars. Two weeks ago, an EPIC-MRA poll found only 11% of the voters thought a tax cut was a good idea. The rest were divided about evenly between those who wanted it to go to schools and those who want it to go to our roads.

Lester Graham / Michigan Radio

To successfully emerge from bankruptcy, Detroit has to find ways to cut spending and increase revenue. But that’s not going to be easy when so many Detroit residents are struggling just to get by.

No matter how well bankruptcy goes for Detroit, the city is going nowhere if most of its residents are broke and without jobs.

No jobs mean no income taxes for the city.

WFIU Public Radio / Creative Commons

Voters in Grand Rapids could get a chance to vote on an income tax extension this year. The city wants to extend a temporary income tax hike to maintain roads and sidewalks.

Grand Rapids voters approved the temporary income tax hike in 2010. It’s paid for a number of projects that will lower the overall cost of running city government. That increase will expire in 2015.

Lindsey Smith / Michigan Radio

A southwest Michigan city under state control will decide whether to impose a new city income tax in Tuesday's election. An emergency manager has been running Benton Harbor since March 2010.

If the proposal passes, people who live or work in Benton Harbor will pay a small percentage of their income to the city government. More than 20 other Michigan cities have an income tax.

Lindsey Smith / Michigan Radio

Benton Harbor Emergency Manager Tony Saunders is breaking months of silence on a proposed city income tax. Saunders says he has some concerns about the proposal.

“I want to make sure we have a strong climate for business investment here. Also, you know this is one of the poorest cities in Michigan, so the last thing I want to see is our citizens being taxed once again when they’re already struggling to make ends meet,” Saunders said.

Steve Carmody/Michigan Radio

The city of Flint may have found about a million dollars in uncollected tax revenue.

Flint Emergency Manager Mike Brown says a check of tax records shows about six thousand Flint residents paid state income taxes last year, but didn’t pay the city income tax.

“Obviously, this is unfair to those folks who do pay their taxes in this city,” says Brown, “We just want to make sure that folks who are working here are filing income tax.”

Flint could use the extra cash.

Republican state Representative Bob Genetski
Photo courtesy of Rep. Genetski's office

How would you like to say farewell to the state income tax?

State Representative Bob Genetski is a Republican from Saugatuck, and he thinks we should do just that.

He has introduced House Bill 4898, which Representative Genetski is calling the “Taxpayer Freedom Act,” and it would allow voters to decide whether to keep the state income tax or get rid of it.

Representative Bob Genetski joined us today.

Listen to the full interview above.

User: Brother O'Mara / flickr

Saunteel Jenkins replaces Charles Pugh as Detroit City Council President

"Saunteel Jenkins is the new President of the Detroit City Council. The Council voted on new leadership after it lost its two former top officials. Jenkins replaces Charles Pugh, who has vanished from the public eye amidst allegations of a questionable relationship with a teenager," Michigan Radio's Sarah Cwiek reports.

Proposed legislation would let voters eliminate income tax

Republican state Representative Bob Genetski is sponsoring legislation that would let voters decide whether to get rid of the state's income tax.

"He supports raising the state’s sale’s tax to make up for the lost revenue. Former director of the state House Fiscal Agency Mitch Bean says the plan would leave an $8.5 billion dollar hole in next year’s state budget," Jake Neher reports.

Orr cancels bus tour with creditors

Detroit emergency manager Kevyn Orr has canceled a planned bus tour meant to convince Wall Street creditors that the city's condition is dire and they should accept big losses on its debt.

"Orr says the tour could be rescheduled. But it increasingly seems that his negotiations with creditors are hitting a wall. City Council member Ken Cockrel echoes what many think--that resistance from creditors is speeding up Detroit’s timeline for a possible bankruptcy filing," Michigan Radio's Sarah Cwiek reports.

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