LANSING — Every Michigan tax filer would get a $180 check from the state this year as part of a plan pitched by Gov. Gretchen Whitmer and fellow Democrats.
In an appearance Monday, Whitmer unveiled the onetime proposal that would cost the state $800 million this year. She was joined by House Speaker Joe Tate, D-Detroit, and Sen. Winnie Brinks, D-Grand Rapids.
“Everyone is going to get a little relief,” Whitmer said. “But people that are working hard and struggling are going to get additional relief.”
Democrats are advocating for immediate distribution of the $180 rebates, which would be sent to the state’s estimated 5 million tax filers.
The rebate is for individual tax filers, so if couples filed a joint return, they would get one payment, rather than $360. Children are ineligible.
Asked how the administration and lawmakers came to the $180 number, Whitmer said, “Math.” She clarified that Democrats were working to have a targeted impact on people that needed the most help while also heeding calls for broader relief.
“As we looked across what we could do that would be helpful to people, this was going to be the biggest way that we could really make a difference in people’s lives,” she said.
Democrats have a slim majority in both chambers of the Legislature, and would need some support for Republicans to pass the measure. Many are already dubious.
“One time $180 checks? Are you telling me this is tax relief? Have you ever been a taxpayer?” Rep. Andrew Fink, R-Hillsdale, wrote in a social media post.
The debate comes as Michigan has a surplus of about $9 billion and families are struggling with inflation, which peaked at 9.1 percent in June 2022.
Whitmer and Democrats also want to expand the Earned Income Tax Credit to 30 percent of the federal version from the current 6 percent and rollback the state’s so-called pension tax on retirement income. Whitmer said Monday the goal is to equalize exemptions for public and private pension income, but offered few specifics.
Families who make less than about $57,000 are eligible for the tax credit, and about 700,000 in Michigan would save nearly $600 per year under Whitmer’s plan. Pension tax changes would save about 500,000 people some $1,000 per year.
Republicans have generally supported an Earned Income Tax Credit expansion and tax reductions for seniors, but they want broader tax cuts. They are pushing Whitmer to allow a 2015 law to take effect to lower the state’s income tax rate to 4.04 percent from 4.25 percent because of growing state revenues.
Democrats have said they don’t plan to repeal that law, but they haven’t ruled out the possibility of trying to avoid the rate reduction through spending down some money.
The Democrats’ current plan would provide more immediate help to those who make lower incomes.
A tax filer who earns $30,000 would save about $52 per year in relief if the income tax rate was reduced to 4.04 percent under the trigger law, as projected by the Legislature’s non-partisan fiscal agency. Those who make $100,000 would save about $210 every year if the income tax rate was permanently reduced to 4.04 percent. Instead, they would get $180 from the Democrats.
“Why would the people of Michigan give up a permanent tax cut for a small, one-time payment of $180?” House Republican Leader Matt Hall, R-Richland Township, said on Monday.
“Gov. Whitmer must stop dodging and start delivering real, permanent relief to Michigan families.”
Asked about whether the one-time checks were meant to replace a possible income tax decrease, Whitmer said the Democrats’ plan on the table “dwarfs any help” that doing nothing or waiting for an income tax rollback “that may or may not happen” would.