Whitmer vetoes GOP plan to cut personal income and fuel taxes

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LANSING — Governor Gretchen Whitmer issued a double-barreled veto on Friday, reversing a massive tax cut passed by the Michigan Legislature and vowing to reject a break in the state’s gasoline tax.

Both movements were expected.

Instead, Whitmer is calling for more targeted tax relief, like repealing the state pension tax and tripling the earned income tax credit for low-income earners. She also wants a break from the sales tax imposed on gasoline, which, unlike the fuel tax, does not support the repair of roads and bridges.

Senate Majority Leader Mike Shirkey, R-Clarklake, accused Whitmer of denying Michigan residents tax relief for partisan reasons.

the The Republican legislature’s $2.5 billion tax cut plan would have reduced the personal income tax rate from 4.25% to 3.9%, increased the amount of all non-taxable retirement income to $40,000 for individuals and $80,000 for couples, reduced the age of eligibility for this break from 67 percent to 62 percent, and would have created a new $500 tax credit for each eligible child or dependent in a home.

Whitmer said it would have ongoing costs of billions a year, putting state programs at risk when most of the state’s roughly $7 billion surplus is only at short term. State budget officials had said it would also violate federal rules that federal stimulus money cannot be used to pay for tax cuts.

Whitmer confirmed she would also veto a break in the state’s 27-cent-per-gallon fuel tax, despite calls for a break in the federal fuel tax of just over 18 cents per gallon, as a way to combat high gasoline prices. Although the bill passed both houses, it had not reached Whitmer’s office by early Friday evening, according to the legislative website.

Friday, Whitmer proposed a break in the 6% sales tax levied on fuel purchasesa decision supported by both Senate Republicans and Democrats, but opposed by House Republicans.

Continued:Whitmer vetoes GOP tax cut, calls on lawmakers to join formal negotiations

Continued:Whitmer calls for temporary suspension of Michigan gasoline sales tax

In his veto letter, Whitmer said the tax cut plan would force “tax hikes for families or deep and painful service cuts, hurt our children’s ability to catch up in school, force layoffs of cops and firefighters, and would put our ability to keep repairing roads in shambles.”

The proposed break in the state’s gas tax, because it was not immediately enforced by the legislature, “won’t go into effect until 2023 and does nothing for Michigan residents facing pump pain right now,” she said.

Shirkey also criticized Whitmer’s Friday proposal to suspend gasoline sales tax.

“The Governor is not just a day late and a dollar short on this issue, she is weeks late and millions of dollars short. Other than writing a letter to (US House Speaker) Nancy Pelosi, she has been absent as Michigan residents grapple with record high gas prices. Now she’s offering a half-measure that won’t spare drivers as much as the bill we’ve already passed.”

House Speaker Jason Wentworth, R-Farwell, also criticized the vetoes.

“The governor talks a good game about tax cuts when she talks to the public,” Wentworth said. “But behind the scenes, she’s doing everything she can to keep money out of Michigan families’ pockets and kill any chance they have of seeing relief.”

Contact Paul Egan: 517-372-8660 or [email protected] Follow him on Twitter @paulegan4. Learn more about Michigan politics and sign up for our election bulletin.

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