Shrinking or No State Tax Refund This Year? Thank a Republican

Middle-class families reeling from higher taxes, fewer tax credits and deductions
Thursday, February 28, 2013

LANSING - State Representative Marcia Hovey-Wright (D-Muskegon) said today that Michigan’s middle-class families now know just how little legislative Republicans and Gov. Rick Snyder think of them as they fill out their tax returns and potentially face higher tax bills and smaller tax refunds, if they get any refund at all.

“As Michigan’s middle-class families sit down to prepare their tax returns, they’re realizing exactly what Republican-backed tax changes mean to them,” Hovey-Wright said. “A lot of the deductions and credits families relied on are reduced or gone completely. The $600 per-child deduction is gone, as is the charitable giving deduction and college tuition and fees credit. The Michigan Earned Income Tax Credit has been reduced to a fraction of what it once was, and 400,000 taxpayers will no longer qualify for the Homestead Property Tax Credit, while others will qualify for less of a credit. Retirement income for seniors is now being taxed, which is going to force several seniors back into the workforce, where there still aren’t enough jobs to go around.”

Republican-backed changes to the Michigan income tax include:

  • Eliminating the extra child deduction — separate from the exemption taxpayers can still take for their children — which was worth $600 for each dependent child age 18 or younger.
  • Slashing the Earned Income Tax Credit, which is based on the taxpayer’s household situation and number of children, from 20 percent of the federal EITC to just 6 percent. In the past, some taxpayers have seen this credit be worth $1000 or more, which means more money to spend on necessities for their family.
  • Cutting the Homestead Property Tax Credit by about $270 million. Some seniors who used to qualify for a 100 percent credit will now qualify for less than that. That credit is now only available to those earning $50,000 or less per year.
  • Freezing the income tax rate at 4.25 percent instead of gradually lowering it to 3.9 percent by 2015, as it previously had been scheduled to do.

“All of these tax changes, which punish our hard-working families, were made because Republicans said we need to give tax breaks to corporate special interests,” Hovey-Wright said. “While big corporations reap the benefits of Michigan’s tax changes, middle-class families are finding it harder to make ends meet, save up for their kids’ education or prepare for retirement. Nobody likes paying taxes, but Republicans have made it downright painful. Rolling back these tax changes are one of my main goals in the Legislature.”