Bill Looks to Reduce State Income Tax Rate to 3.9%
Feb 24 2017
Despite this, House Bill 4001 went down in flames on a 55-52 vote.
Eleven Republicans joined all but one Democrat in opposing the legislation.
An earlier version of the bill continued the decrease each year until the income tax rate was reduced to 0% in the year 2057.
"It's unfortunate. We wanted to produce legislation that was going to bring income tax relief to the hard-working taxpayers of this state", House Speaker Tom Leonard told reporters. They say the plan would lower taxes for all business, free up capital for companies to invest in America, protect American jobs from foreign competition, and stop corporate inversions and acquisitions of USA companies.
In opposition to the proposed border tax, more than 150 other major United States companies, including Nike, Gap, Target, QVC and Levi's, formed the Americans for Affordable Products.
The nonpartisan House Fiscal Agency estimates revenue in the $10.5 billion general fund would fall by $195 million in the next budget under the measure, growing to a $1.1 billion reduction in the 2021-22 fiscal year if fully implemented. Passing additional costs totaling $1,700 per year on middle-income households so that companies exploiting loopholes in the tax code can gain additional special advantages is not an idea that will sell with voters who supported Republicans last fall as evidenced by the fact it has generated little to no support in the US Senate thus far, " Baca said.
Conservatives who were pushing the tax cut say it should return to 3.9 percent where it was back in 2007.
That never happened because Snyder and the GOP-led Legislature in 2011 froze the rate at 4.25 percent while slashing the main business tax, taxing retirement income and making other tax changes. We expect legislative language to be released by House Republicans this Spring, and a separate proposal to be released in the Senate later this year, on top of the Trump proposal promised (presumably in outline form) in the coming weeks. They also warned it would reduce funding for universities, local communities that need state aid for police and firefighters, and the social safety net for low-income residents. Chuck Schumer (D., N.Y.) urging them to make the USA tax code more pro-growth and lower rates for businesses so they can actively compete with global competitors.