Michigan Gov. Gretchen Whitmer (D) has asked state lawmakers to triple the state’s tax credit for low- and moderate-income workers, The Associated Press reported.
Whitmer’s proposal, which will be unveiled in her state of the state address, will restore the state-earned income tax credit to 20 percent of the federal credit.
This initiative would give low- to moderate-income workers an extra $350 in their yearly salary, according to the AP.
More than 730,000 families are aided by the state’s refundable credit. During the 2019 tax year, state families earned an average credit of $150.
According to Whitmer’s proposal, the refundable credit will rise to nearly $500, the AP noted.
“Michiganders who work hard every day to provide for their families deserve a break and a bigger tax refund,” Whitmer’s office said in a prepared statement.
The state’s tax credit was scaled back to 6 percent a decade ago by a GOP-written law that slashed business taxes, the AP reported.
Whitmer has proposed doubling the earned tax credit in an effort to offset the impact on low-income workers of a 45-cents-a-gallon fuel tax increase and also tried to reinstate the tax exemption for pension income to help boost taxes on certain state business, according to the outlet.
Whitmer’s proposals come as the state’s two main revenue funds are projected to take a revenue worth $5.8 million more than the previously estimated three fiscal years.
State Senate Republicans lawmakers introduced a bill last month that would lower the personal and cooperate income tax rates from 4.25 percent and 6 percent to 3.9 percent and create a monthly tax credit worth $500, the AP reported.
State Senate Republican leaders said last week that they plan to make the tax relief a priority in their budget plan this year, citing the effect of inflation on families’ budgets, the AP noted.