Michigan Capitol, by Allie Osmar Siarto, licensed under CC
Yesterday, HB 4170, a bill proposed by Rep. Kathy Schmaltz to lower Michigan’s income tax rate from 4.25% to 4.05%, passed through the Michigan House. This feat was accomplished in no small part due to Speaker Matt Hall’s efforts to mobilize House Republicans and get their full support for this bill.
Not only does HB 4170 provide immediate relief for struggling Michigan families, but it also ensures the permanency of any future cuts resulting from a trigger that had been rightfully passed in 2015.
If Democrats played fair, the bill would never have been necessary.
Unfortunately, once revenue exceeded a predetermined threshold in 2023, finally activating the trigger, Whitmer’s Attorney General Dana Nessel scrambled to deny taxpayers the benefits they deserved.
Her opinion rested on the completely fabricated idea that the drafters of this trigger did not, actually, intend for it to be permanent.
This specious decision was, of course, challenged in court. As it turned out, the very people who Nessel claimed to be speaking for explicitly denied her rationale, defending the trigger’s permanence.
Unfortunately, Michigan’s supreme court, rather than considering the facts of the case – which is their job – completely abandoned any semblance of impartiality and upheld the AG’s decision contrary to reason.
States with low or no income taxes are far more appealing to families, businesses, and entrepreneurs, as they create an environment that fosters job creation, higher wages, and expanded opportunities. Most importantly, these policies empower hardworking Michiganders to keep more of their own money.
The trend of states moving toward lower and flatter income tax rates continued steadily in 2024. If Michigan lawmakers want to remain economically competitive, they cannot afford to slow down now while neighboring states like Indiana and Ohio push forward with efforts to reduce taxes.
HB 4170 represents Speaker Hall and the state’s House Republicans firing back against Governor Whitmer’s tax-and-spend agenda, clarifying the trigger law and restoring the justice that their supreme court was unwilling to provide. However, the ball unfortunately rests in the Michigan senate’s court, which holds a democratic majority.
Hopefully, some Senate Democrats will set aside their partisan differences, as seven of their colleagues did in the House, recognizing the need for substantial tax relief to revive the state’s dwindling population and keep Michigan economically competitive with its neighbors. HB 4170 is the first step in that fight, and ATR commends all lawmakers who supported the legislation.
