Republican Tax Hikes Push Michigan Families to Give Gifts to Corporations
LANSING – Like the Grinch riding into Whoville under the dark of night, Michigan’s legislative Republicans are hoping you won’t notice that their recent tax hikes are putting your holiday plans in peril. In 2011, Republicans pushed a number of tax increases through the Legislature, including drastic cuts to the Earned Income Tax Credit and Homestead Property Tax Credit, the elimination of the charitable giving credit and the end of the $600 per-child deduction. At the same time, Republicans also punished seniors with a new tax on retirement income. Republicans promised that the changes were needed to pay for a $1.8 billion corporate tax break that would lead to more jobs. The jobs have failed to materialize, and Michigan’s unemployment rate has stagnated at 9 percent for the past three months.
The tax increases to middle-class families, however, are very real.
“Instead of shopping at locally owned small stores and businesses for gifts for family and friends, many Michigan families are scaling back their plans and trying to do more with less,” House Democratic Leader Tim Greimel (D-Auburn Hills) said. “Instead of bringing home the gifts their loved ones hoped for, they’ve been forced to give a gift to major corporations instead.”
The tax increases are costing many families hundreds of dollars. According to the Institute on Taxation and Economic Policy, families with an income between $33,000 and $53,000 will pay $296 more in income taxes because of the changes. Families with an income between $53,000 and $83,000 are paying $514 more in taxes.
“It’s a shame that, because of legislative Republicans, Michigan families are forced to give gifts to major corporations instead of their own children,” Rep. Brandon Dillon (D-Grand Rapids) said. “Fortunately, these corporate gifts are the kind that can be returned. That’s why House Democrats have introduced measures to get rid of these tax increases. I call on legislative Republicans to make the holiday season a bit brighter by supporting them.”
Getting rid of the Republican tax increases would free up considerable money that families could spend on gifts for their friends and family. For example, the reduction to the Earned Income Tax Credit cost the average family claiming the credit $307, according to the Michigan League for Human Services. That’s enough to buy a Kindle Fire HD Tablet with 32 gigabytes of storage. The amount an average family is losing in the Homestead Property Tax Credit, $585, could pay for a Microsoft Xbox One and a game or two. Meanwhile, the average charitable giving credit claim of $80 is enough to buy a child a Furby and yourself a pair of headphones.
“Most families only realized their taxes went up when they sat down to do their taxes earlier this year,” Greimel said. “Now, they’re anticipating the higher tax bills they’ll pay again in a few months. Their hard-earned dollars have to go to pay taxes, and there’s less left over to spend on gifts for their family and friends.”