SE Grand Rapids News

State Representative Gina Johnsen, a Republican from Lake Odessa, has announced her support for a new Republican initiative aimed at reducing Michigan's state income tax rate to 3.9%. This proposal is intended to provide financial relief to families dealing with the rising cost of living.

The start of this week marked the beginning of the 2023 tax filing season in Michigan. Taxpayers may notice higher returns due to a previous Republican law that lowered the state income tax rate from 4.25% to 4.05%. Although initially meant to be permanent, this reduction was reversed by Democrats in Lansing for the year 2024.

“When people get their 2023 tax returns, many will be getting back more money than they expected,” said Johnsen. “Those increased returns are a direct result of a Republican tax cut. Unfortunately, Democrats twisted the law, which was intended to be permanent, so it would only have effect through 2023. This new Republican plan couldn’t be clearer. The income tax would be immediately lowered to 3.9%, getting tax relief for the working class and leaving no bureaucratic loopholes for the governor to exploit.”

House Bill 5399 seeks to fulfill an earlier promise by restoring the tax rate to its previous level before it was raised during Governor Jennifer Granholm’s administration in 2007 as part of an agreement meant to prevent a government shutdown.

“Between grocery, electric, and fuel costs, people are dipping into their savings more and more each month,” Johnsen added. “An income tax cut is the best way we help people in our communities replenish some of those savings.”

Data from the Mackinac Center for Public Policy indicates that states with lower income taxes have seen job growth rates increase by 5.7% above pre-pandemic levels, compared to about a 2% increase in states with higher taxes since then. Michigan remains behind these figures with job numbers still below pre-pandemic levels according to recent data from the Bureau of Labor Statistics.

House Bill 5399 has been sent to the House Government Operations Committee for further consideration.