Michigan tax relief certain, but what form will it take?

That some Michigan residents will be getting a tax cut is virtually certain. The form it takes is very much up in the air, however, despite Gov. Rick Snyder’s support for a partial restoration of the Homestead Property Tax Credit.

Many Republicans are not happy with Snyder’s proposal, which would permanently raise the income cutoff for the Homestead Property Tax Credit to $60,000, still short of the $82,650 threshold that existed before the governor took office in 2011.

Snyder felt that tax relief should be targeted for lower- and middle-income families. His proposal would mean an estimated 1.3 million taxpayers would pay $103 million less in taxes in year one, equaling about $79 per filing, according to an Associated Press report.

State Rep. Patrick Somerville (R-Huron Twp.) indicated he would favor something that is broader based. He worries about “further complicating the tax code.”

Somerville instead favors a plan that would reduce the income tax from its current 4.25 percent to 4.15 percent on Oct. 1; to 4.05 percent in October of next year; and possibly to 3.95 percent the year after if the state has a surplus of $300 million or more at the time.

Pension tax relief also might be in order, he said.

Sen. Patrick Colbeck (R-Canton) said his first concern is the condition of Michigan’s roads, but he concedes there may be room for tax reduction. Colbeck, whose district includes eight communities in the southern portion of Downriver, said he likes “the idea of reducing property taxes,” and he also thinks that “promoting charities is a good way to help the poor.”

To that end, he indicated he would support an increase in the limit for charitable tax deductions. Colbeck feels the private sector is more effective in helping the underprivileged than the public sector.

Democratic lawmakers questioned for this colum did not respond, but Rep. Andrew Kandrevas of Southgate last year endorsed a Democratic plan to restore tax credits and deductions to middle-class families and repeal new taxes on retirees.

In a statement on his website, State Sen. Hoon-Yung Hopgood (D-Taylor) said “the governor’s incomplete restoration of the Homestead Property Tax Credit pales in comparison to the thousands of dollars in additional taxes he has placed on Michigan families, and his budget continues to rely on taxes on retirement income and the elimination of the child deduction and the reduction of the Earned Income Tax Credit.

“The proposed increased income threshold to qualify for the Homestead Property Tax Credit remains far below what it was before it was slashed by the governor earlier in his term, leaving thousands of middle class families unable to qualify for it and paying higher taxes as a result.”

Democrats have been consistent in their criticism of the governor and the legislature for raising taxes on individuals while cutting them on businesses in 2011.

Colbeck said it is certainly nice to be talking about a $1 billion surplus as opposed to the $1.5 billion deficit that faced lawmakers and Snyder in 2011.

“It’s tough to say what will pass,” Somerville said. It could be a “combination of everything.” He called the situation a “moving puzzle,” but said there should be enough in the surplus to provide significant tax relief, increase funding for roads and schools and set aside a rainy day fund in the range of $750 million.

There’s still time for taxpayers to weigh in. They should email their state representatives and senators.