Under the plan, Snyder’s February proposal to eliminate the Michigan Business Tax and replace it with a 6% corporate income tax would survive virtually intact. But the governor’s proposal to tax pension income would be significantly scaled back.
Republican lawmakers had been bucking the pension tax plan, with some suggesting they wouldn’t vote for it in any form.
The proposed changes to Snyder’s plan reportedly include exempting all pension income for those over age 66, and exempting $45,000 in pension income ($90,000 for couples) for some younger retirees.
If they are holding the corporate tax at 6%, that means more budget cuts are coming for you and yours. Will update when details become available.
The DNews adds this:
Under the budget Snyder proposed Feb. 17, Michigan's personal income tax rate was scheduled to fall from 4.35 percent to 4.25 percent effective Oct. 1. The tentative agreement would delay that planned reduction for one year, putting about an extra $170 million in state coffers, according to one source.
That rollback was part of the agreement in '07 - and if Betsy DeVos were here, she would be calling it a "tax increase" by pausing that reduction. But once again, apparently it's OKIYAR.
$20 to the first reporter that tracks down Chris Ward and asks him what he thinks about this...
UPDATE: Luke has got the details on the rest of the tax increase:
A big chunk of the difference, more than $200 million, would be made up by limiting eligibility for the Homestead Property Tax Credit. The credit provides a refundable income tax credit that defrays the cost of local property tax bills.
Under current law, those with incomes up to $82,650 can claim the credit. Snyder’s original plan lowered that eligibility threshold to $70,000. The compromise reduces it to $50,000. So if you’re a 67-year-old retiree with $51,000 in income and currently qualify for the homestead credit, you’d still face a tax hit of as much as $1,200.
Benefits of the homestead credit would be adjusted according to income with the biggest beneficiaries being non-seniors those with less than $20,000 in income.
Also - the EITC is still up to be cut, as well as another $150 million that so far is unspecified, but it may come out of Medicaid. So, for all Snyder's bragging about sparing health care, it may be under the ax as well.
All to cut taxes for business, a plan that Republicans admit might not work. Imagine if Snyder had run on this. Think he would have been elected?