Democrats Propose Nearly $1B In Middle-Class Tax Credits
LANSING (AP) -- Democrats in the Republican-controlled Legislature proposed nearly $1 billion in tax cuts geared toward families with children and people paying off college loans in an attempt to shift more of the tax burden to businesses.
The plan unveiled Monday would give households making up to $100,000 a year a $400 tax credit for each child under age 14 and a state-level dependent care credit tied to a federal credit. Any employed resident could claim a credit for up to half of the amount paid on federal and state higher education loans; an employer could claim a business tax credit for student loan payments made on the behalf of an employee.
Other initiatives would make homeowners and renters earning up to $100,000 eligible for a tax credit, double the current $50,000 limit, and restore a tax $2,300 exemption for seniors age 65 and older.
House Minority Leader Tim Greimel said a family of two working parents and two schoolchildren could save more than $1,500 per year under the Democratic proposal. He said while the majority GOP has ruled out Democrats' 2-month-old $530 million business tax hike proposal as part of a still-elusive roads plan, the additional revenue could be used instead to provide tax relief to people hurt by Republicans' 2011 tax overhaul.
"We're talking about reversing some of the largest tax increases on Michigan's hard-working families and seniors that we've ever seen," Greimel told reporters during a news conference at the House Office Building.
He said amending business tax incentive deals - like Ford Motor Co. and the state economic development agency did in June - is the "first and foremost place" where lawmakers should look to cover the budget cost of nearly $1 billion in tax cuts. Republicans have questioned the ability to save significant amounts from renegotiating credits issued during the recession, primarily for promises made by Detroit's major automakers to keep jobs in the state.
Even if the state's entire liability for old Michigan Economic Growth Authority credits were wiped clear - a highly unlikely scenario - that would save under $600 million a year.
"This isn't about the middle class. This is about putting on a dog and pony show to get themselves elected, and they're not even any good at that," said Gideon D'Asssandro, spokesman for House Speaker Kevin Cotter.
The Michigan Economic Development Corp.'s leader has said the Ford agreement, which required the carmaker to invest $3.1 billion over a decade to qualify for its maximum credits, is a "great framework" for similar talks with a half-dozen unnamed companies.
Democrats made their proposal at a time Republican Gov. Rick Snyder and legislative leaders continue to discuss a $1.2 billion plan to improve deteriorating roads, including an $800 million increase in fuel taxes and vehicle registration fees and a shift of $400 million from other spending. Greimel said some of the tax credit ideas mentioned Monday have been brought up in talks. Republicans have talked about linking a broader income tax cut to roads legislation.
