Snyder Signs Sweeping Tax Measure Into Law 5-25-2011 - WNEM TV 5

Snyder Signs Sweeping Tax Measure Into Law 5-25-2011

Gov. Rick Snyder has signed a sweeping tax proposal he says is key to his efforts to improve Michigan's economy.
The legislation cuts overall business taxes by about $1 billion in the fiscal year starting Oct. 1 and $1.7 billion the following year. It replaces the Michigan Business Tax with a 6 percent income tax on corporations with shareholders, which about two-thirds of Michigan businesses won't have to pay.
“This is a defining moment in Michigan’s turnaround,” Snyder said. “The current tax system is riddled with inequities that are hostile to job growth. Eliminating these longstanding barriers will level the playing field for taxpayers, encourage entrepreneurship and spur more investment in Michigan."
It also raises more money from individual taxpayers by increasing taxes on some retirees' pensions, shrinking tax breaks for low-income workers and eliminating many credits and deductions.
Snyder put pen to paper Wednesday in the governor's press auditorium in the Romney Building.
Critics say the law will hurt seniors, the poor and the quality of education, which faces cuts.
Snyder says revamping Michigan's tax code will help create jobs by making Michigan a more attractive place to do business. When the bill passed the Senate last week, he called it a "huge step forward in terms of job creation."
In a news release, the governor said the changes take Michigan from 30th to 16th in the nation in terms of lowest state and local business tax burden, according to the Council on State Taxation. The state’s corporate income tax rate will be the lowest in the Midwest. In addition, Michigan will have the 14th lowest personal income tax burden among the states that have a broad-based personal income tax.
Union leaders are expressing skepticism that the sweeping tax proposal will create jobs.
Michigan AFL-CIO President Mark Gaffney said Wednesday the new law will raise the amount individuals pay in income taxes, which could hurt the economy by decreasing consumer spending.
He says there's no guarantee the tax cut creates more jobs.

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