State House OKs Biz Tax Cut, Pension Tax

LANSING (WWJ) - Governor Rick Snyder's plan to revamp the state's business tax has just cleared a big hurdle.

The GOP-led Michigan House, Thursday, passed a bill that would slash business taxes while raising taxes on retirees and other individual taxpayers.

"They needed 56 votes and they got exactly that," reported WWJ Lansing Bureau Chief Tim Skubick.

Majority Republicans said the bill is key to encouraging businesses to add jobs in a state with a 10.3 percent unemployment rate. It eliminates the Michigan Business Tax and replaces it with a corporate income tax on large corporations with shareholders.

The measure now goes to the GOP-led Senate.

Democrats opposed it, saying it's wrong to cut business taxes $1.7 billion while shifting the burden to seniors, children and the poor.

Ann Arbor Democratic Representative Jeff Irwin calls it a monumental and unfair tax shift.

"The burden for funding state government is going to be shifting from a mix of taxes on people and businesses, to a tax policy where businesses will not be asked to pay any share, any meaningful share," Irwin said.

Irwin said he fears eliminating the earned income tax credit for low income workers will push some residents over the edge.

"It's the wrong time to be putting more pressure on low-income workers. And I also think it's gonna add to the welfare roles. And it's going to end up costing the State nearly as much or more than we're saving," he said.

Under the bill, that credit will be replaced by a $25 per-child credit.
  
The Associated Press contributed to this report.