Rutledge Speaks Out Against Tax Increase on Seniors and Working Families

House plan would pay for a $1.7 billion tax cut for businesses
Thursday, April 28, 2011

LANSING – State Representative David E. Rutledge (D-Ypsilanti) today voted against a Republican plan to tax pensions, decimate the state Earned Income Tax Credit, and require deep cuts to public schools. The legislation passed the state House 56-53 on Thursday afternoon.

“Clearly, our state must make significant changes to the broken tax structure,” Rutledge said. “This is not about trying to maintain the status quo; one of the main reasons I ran for office was to help make the structural reforms Michigan needs to move forward. But this plan balances the budget on the backs of low-income and working families, retirees, and children, while giving businesses a $1.7 billion tax cut. This is not fairness, this is not ‘shared sacrifice’.”

The legislation, House Bill 4361, is similar to the Governor’s budget proposal, reflecting the agreement negotiated by Governor Snyder and Republicans in the Legislature earlier this month. It includes a phased-in, three-tiered tax on pensions, reduces or eliminates tax incentive programs, like the film incentives and Brownfield credit programs, and transfers resources from the School Aid Fund to pay for other areas of the budget.

“This process could have been more bipartisan, more thoughtful, and still produced real reforms,” Rutledge said. “There are changes nearly everyone agrees on, like eliminating the unfair surcharge included in the current tax structure. But this plan asks children, seniors, and working families to pay for an 82 percent tax break for businesses.”

Governor Snyder has advocated for a six percent Corporate Income Tax for only certain businesses, with most types of businesses paying no business tax.

“I am deeply concerned about the short-term thinking this proposal reflects,” Rutledge said. “Shifting the burden from one area to another is not a sustainable, or responsible, solution, and it does not address the structural problems within state government.”