LANSING, Mich. — The state Senate on Tuesday approved a historic $2.5 billion tax cut plan negotiated by Sen. Jim Runestad, chair of the Senate Finance Committee, which would reduce taxes on all seniors, both working and retired, by substantially raising the personal exemption on all senior income from $20,000 to $30,000 for individuals and from $40,000 to $60,000 for couples.
The legislation also includes the tax plan Runestad marshaled out of committee to reduce personal and business income tax rates and provide families with a $500 per child tax credit.
Runestad’s proposal to increase income deduction amounts for individuals age 67 and older was first passed out of the Senate Finance Committee last June but was stalled on the Senate floor. Since that time, the Senate passed Runestad’s bill for a $500 child tax credit. The new Senate tax plan passed on Tuesday rolls four measures into one, providing broad-based tax relief for Michigan’s seniors, businesses and working families.
“With historic levels of inflation, those on fixed incomes are going to be impacted even more,” said Runestad, R-White Lake. “The money that seniors have budgeted for retirement is losing its real-life value, and most seniors are not in a position to go out and pick up a new job or source of income. I’m calling on the House and the governor to pass this legislation now for Michigan seniors and families who need to heat their homes and fill their gas tanks.”
Senate Bill 768 would lower the state’s personal and business income tax rates to 3.9% from 4.25% and 6%, respectively, and provide families with a $500 per child tax credit. An amendment offered by Runestad was adopted to increase the tax exemption on all senior income.
“My tax plan is a broad-based approach to help all working Michigan families, seniors and businesses,” Runestad said. “In contrast, the governor’s proposed tax plan only reduces taxes on retirement income.
“In 2007, Michigan’s income tax rate was increased from 3.9% to 4.35% and a promise was made to roll it back to 3.9% by 2015 — that didn’t happen. We must make good on that promise for the people of Michigan, who have weathered the economic and supply chain disasters that have followed the poor unilateral policy decisions, and now battle historic levels of inflation in the wake of astronomical Washington spending.”