Democrats propose $1B in tax credits
Lansing — Democrats said Monday they plan to introduce legislation that would give an array of income tax credits for higher education, child care and home ownership to senior citizens and working-class families in Michigan.
Tabbed a “Blueprint for America’s Families,” the plan would be funded with $1 billion in renegotiated tax credits the state has granted to corporations for plant expansions and job creation during the past decade.
“It’s the right way to fix Michigan’s economy,” said House Democratic Leader Tim Greimel, D-Auburn Hills. He called it a plan “to help parents raise a family, send kids to college, own a home and stay in it during retirement.”
The proposal is unlikely to go anywhere in the Legislature, where Republicans control both the House of Representatives, the Senate and the governor’s office. But Greimel said Democrats have raised some or all parts of the plan during discussions to increase state road repairs by at least $1.2 billion more annually.
In the past two legislatures, Democrats have rolled out similar plans to point out their policy differences with the GOP majority.
Greimel charged the legislative majority and Republican Gov. Rick Snyder lost sight of middle-class families when four years ago they approved nearly $2 billion in business tax cuts while adding $1.6 billion to the income tax burden of working-class residents.
Gideon D’Assandro, press secretary for House Speaker Kevin Cotter of Mount Pleasant, released a statement blasting the plan by comparing it to 2013 Democratic middle-class proposals that Republicans said were flawed and filled with half-truths.
“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,” he said, referring to the Democrats loss of House and Senate seats during the 2014 election.
Bills introduced by House Democrats would:
■Provide a $400-per-child income tax credit for each child 13 or younger to families with incomes below $100,000 annually.
■Create a dependent-care income tax credit to cover child or elderly parent care for middle-class families with working parents.
■Expand eligibility for the Homestead Property Tax Credit on state income taxes to include families making as much as $100,000, up from the current $50,000.
■Provide a $2,300 income tax exemption for anyone 65 or older.
■Create a “college affordability” income tax credit equaling as much as half the amount paid on state and federal higher education loans, available to all employed Michigan residents.
While tax savings would vary, the Democrats estimated they could go as high as $1,500 a year — maybe more — for families with incomes lower than $100,000 a year.
There was no indication how the companies would be prodded to reopen the contracts.
But Ford Motor Co. in June pledged to invest $3.1 billion in Michigan facilities to keep its tax breaks capped at $2.3 billion. The new agreement came after The Detroit News reported business tax credits have put a strain on the state’s budget with the revised value of the credits growing from $6.5 billion to $9.38 billion over the next 16 years.
General Motors Co. and Fiat-Chrysler have yet to reach similar agreements.