Promises to keep: income tax rollback

Tribune Staff • Jan 23, 2017 at 1:00 PM

Michigan lawmakers are back to work in the state Capitol, and have come out with some interesting legislation to start the new two-year term.

One of the most interesting proposals — there’s one in the House and one in the Senate right now — is to eliminate the state’s income tax.

The proposal from state Rep. Lee Chatfield, R-Levering, offers lowering the present 4.25 percent to 3.8 percent in 2018, then a very slow trickle-down by a tenth of a percent each year until it reaches zero. That would be the year 2057.

There are seven states that have no income tax at all: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. However, state revenue has to come from somewhere, and two of those states (Texas and Nevada) have above-average sales tax. Other states on that list have high property taxes or gas pump taxes.

So, it sounds nice, but at what price?

Indeed, the idea being floated by state Sen. Jack Brandenburg, R-Harrison Township, would include raising the sales tax and spending cuts.

2017 marks the 50th anniversary of the Michigan income tax. It was originally 2.6 percent. It rose to 3.9 percent in 1972, to 4.6 percent three years later, then bounced around in the 1980s, peaking at 6.35 percent under Gov. James Blanchard, who promised it would only be a temporary hike to fix the state budget. That promise was kept, as it was rolled back over the next few years to 4.6 percent.

It trickled down to about 4 percent until 10 years ago, when Gov. Jennifer Granholm and the Legislature promised taxpayers that hiking the income tax to 4.35 percent would also only be temporary. It was to be rolled back, they said, until it got down to 3.9 percent in 2015.

But that didn’t completely happen, as you’ll soon find out when you do your tax return.

So, Michigan taxpayers are owed at least Chatfield’s initial rollback.

The slow trickle-down? Well, we’ll see that when and if it happens — if we should live that long.

Like lawmakers in Washington, Michigan is being led by a Republican (Gov. Rick Snyder) and a GOP-led House and Senate. There should be no excuses not to get some work completed, and rolling back the state income tax sounds like a good place to start. Just do it right, and keep your promises.

Our Views reflects the majority opinion of the members of the Grand Haven Tribune editorial board: Kevin Hook, Matt DeYoung, Alex Doty and Mark Brooky. What do you think? E-mail us a letter to the editor to [email protected] or log-in to our website and leave a comment below.

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