LANSING (WWJ/AP) – Michigan Governor Rick Snyder has signed the most sweeping tax change in the state since 1994 when Proposal A fundamentally altered the way schools are funded.
Union leaders have expressed skepticism that the legislation Snyder signed Wednesday will create jobs. Michigan AFL-CIO President Mark Gaffney says the new law will raise the amount individuals pay in income taxes, which could hurt the economy by decreasing consumer spending. He says there’s no guarantee the tax cut creates more jobs.READ MORE: Water Testing Shows No Detection Of Hexavalent Chromium After Spill
And, according to WWJ Lansing Bureau Chief Tim Skubick, State Democrats agree.
“They are very critical. They are saying that in order to provide this business tax relief on an ‘if come’ (basis) with the jobs, they’re basically taking the money from seniors citizens, retirees, young kids and the truly needy,” Skubick said.READ MORE: Jury Selection Begins In 2nd Trial In Whitmer Kidnap Plot
The new plan cuts overall business taxes by about $1 billion in the fiscal year starting Oct. 1 and $1.7 billion the following year and replaces the Michigan Business Tax with a 6 percent income tax on corporations with shareholders. Some of those companies will pay more, but most companies won’t pay the tax.
“The Governor believes, in the long run, it will work. The Democrats, in the short-run and the long run, believe it will not,” Skubick said.MORE NEWS: Former Sterling Heights City Council Candidate Charged With Election Fraud
The Associated Press contributed to this report.