State Rep. Dian Slavens (D-Canton) has signed onto legislation that would increase the personal exemption that people can claim when filing their income taxes by $100 starting in 2014.
The bill was introduced by Rep. Andy Schor (D-Lansing).
"There has been a lot of talk about using the budget surplus to give Michigan citizens a tax cut," Slavens said in a news release. "If we decide to move forward with that plan, I believe we should give out tax relief in a fair and equal way."
Increasing the personal exemption by $100 would be a $100 benefit for everyone that files income taxes. Decreasing the income tax by 0.1 percent would disproportionately help those with greater incomes. A person making $40,000 would have a tax cut of $40 per year, while a person making $400,000 would have a tax cut of $400 per year.
Cutting the income tax 0.1 percent would cost about $200 million. Increasing the personal exemption would cost the state $30 million.
"Increasing the personal exemption will put money back into the pockets of hard-working Michiganders while still allowing the state to invest in things such as roads and schools," Slavens said. "This is really a win-win for Michigan, and that’s why I’ve added my support to the bill."
A similar proposal was passed into law in the previous session. Public Act 224 of 2012 increased the personal exemption to $4,000.
The new bill would increase the personal exemption to $4,100 starting Jan. 1, 2014.
Source: news release