Michigan House GOP struggles to find support for income tax cut
- Author: Delores Daniels Feb 24, 2017,
Feb 24, 2017, 0:13
The latest version of the proposal was a big departure from the original House plan, which would have cut the tax to 3.9% in the first year and then gradually eliminate the tax over the next 39 years.
Republican State House Speaker Tom Leonard was a major advocate for the tax cut.
Senate Majority Whip John Cornyn of Texas said the votes to approve the tax may not be there.
After hours of trying to wrangle votes and a couple amendments to the original bill, Republicans in the House came up short, with several of their own members voting against the bill.
"At a time when other countries have lowered their tax rates and enacted territorial taxation to attract investment and create jobs, the US tax code continues to stand still", they wrote.
Speaker Ryan cited a Tax Foundation report that found if the House GOP plan were implemented, the United States' worldwide competitive rating would move from rank 31 to 3-just behind Estonia and New Zealand.
"I had an overwhelming majority in my caucus that wanted to let the world know where they stood in terms of defending tax payers in the state."
Critics of the legislation, including some in the state Senate and Governor Snyder, said the tax cut would put a huge hole in the state budget. In 2021, a person with $50,000 in annual taxable income could pay $175 less than today if the legislation is signed into law. The tax was scheduled to gradually drop back to 3.9 percent by 2015.
Beginning in 2023 this bill would also provide for an automatic decrease in the income tax rate when, generally speaking, General Fund revenues increase from one year to next by more than inflation.
"We have a responsibility in government to fulfill our promises".
Democrats and other opponents criticized the cut as disproportionately benefiting the wealthy.
In a letter addressed to Speaker of the House Paul Ryan, Democratic Leader of the House Nancy Pelosi, Majority Leader of the Senate Mitch McConnell and Democratic Leader of the Senate Chuck Schumer, the coalition of 16 companies sent out an impassioned plea to roll back federal policies, mainly on the tax front, that restrain the growth of the USA economy.
Democratic Rep. Brian Elder of Bay City said his average constituent would get a tax cut equaling a "paltry $3 a week".