Income Tax Reduction Loses in State House

by Jared Lewis February 24, 2017, 0:13
Income Tax Reduction Loses in State House

Despite this, House Bill 4001 went down in flames on a 55-52 vote.

Speaker Ryan cited a Tax Foundation report that found if the House GOP plan were implemented, the United States' global competitive rating would move from rank 31 to 3-just behind Estonia and New Zealand.

Republican State House Speaker Tom Leonard was a major advocate for the tax cut.

Eleven Republicans joined all but one Democrat in opposing the legislation.

Republicans have said that in the last seven years that businesses had gotten the benefit of tax cuts, but regular citizens have been left out.

In a session that began Wednesday afternoon, House legislators stayed up all night debating the state income tax bill, taking a final vote after midnight. But GOP leaders could not muster support in the full chamber and on Tuesday amended the bill to reduce the tax to 3.9 percent over four years and to end the bid for full elimination. By applying the border adjustment, say the authors, the US corporate tax would apply to USA sales, regardless of the location of production or ownership. And the rollback would pause if the rainy day fund dipped below $1 billion. "More and more" USA companies are going to leave the country if the tax laws aren't changed, he said.

IBD'S TAKE: Supporters of the border tax plan say that the dollar would rise by 20% vs. other currencies, meaning that it wouldn't harm either corporate profits or consumers.

Snyder had expressed "serious concerns" with earlier versions of the income tax proposal, pointing to tax cuts already enacted under his watch and to approaching budget pressures such as increased road spending.

But that never came up for a vote, and was also slammed by Governor Snyder because it didn't replace the revenue.

Senate Majority Leader Arlan Meekoff says a state income tax cut just means you pay the money to Washington instead, because you don't get to deduct it from your federal income. We expect legislative language to be released by House Republicans this Spring, and a separate proposal to be released in the Senate later this year, on top of the Trump proposal promised (presumably in outline form) in the coming weeks.

President Trump on Thursday said House Republicans' proposal to subject USA imports to a tax could create jobs, giving a public boost to the provision that has faced criticism from lawmakers and businesses.

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