Contact: Judy Putnam at (517) 487-5436
May 22, 2012
Election-year politics at play in tax rollback discussion
Recent suggestions that the income tax rate should be rolled back six months early or that the personal exemption should be increased sound like election-year politics. These proposals are tied to the news that revenues are up for this fiscal year.
General Fund revenues, however, will fall in Fiscal Year 2013 as business tax revenues plummet. Proposals passed last year raise taxes on individuals by $1.4 billion, while reducing business taxes by at least $1.7 billion.
These changes hurt the lowest-income families the most. If state policymakers are interested in reducing the tax burden on individuals, they should start by restoring some of the state Earned Income Tax Credit, which was cut from 20 percent to 6 percent of the federal EITC. Putting money into the hands of these low-income families helps to fuel local economies as the dollars are quickly spent in small businesses across the state.
— This statement may be attributed to MLHS Policy Director Karen Holcomb-Merrill