State Rep. Gina Johnsen, R-Lake Odessa, Thursday announced her support for a recently introduced Republican plan that would immediately reduce the state income tax rate to 3.9%. The tax cut would provide relief for families struggling to keep up with the high cost of living. 

Monday marked the first day 2023 tax filings could be submitted. Filers in Michigan may see a higher-than-expected 2023 return stemming from a Republican-passed law lowering the state income tax rate from 4.25% to 4.05%. The tax relief was intended to be permanent. However, Lansing Democrats undercut the plan in 2023 and successfully pushed for taxes to go back up in 2024.

“When people get their 2023 tax returns, many will be getting back more money than they expected,” Johnsen said. “Those increased returns are a direct result of a Republican tax cut. Unfortunately, Democrats twisted the law, which was intended to be permanent, so it would only have effect through 2023. This new Republican plan couldn’t be clearer. The income tax would be immediately lowered to 3.9%, getting tax relief for the working class and leaving no bureaucratic loopholes for the governor to exploit.”

The Republican plan, House Bill 5399, would follow through on a promise to restore the rate to 3.9 percent after it was raised during Gov. Jennifer Granholm’s administration.

In 2007, as part of a legislative deal to avoid a government shutdown, then-Gov. Granholm and state lawmakers agreed to temporarily increase the state income tax rate. The pledge at the time was for the tax rate to fall back to the original level by 2015, but it never happened. The state income tax rate was later reduced in 2012 and temporarily dipped to 4.05% in 2023. Under Democrat leadership, the tax rose 4.25% in 2024.

“Between grocery, electric, and fuel costs, people are dipping into their savings more and more each month,” Johnsen said. “An income tax cut is the best way we help people in our communities replenish some of those savings.”

According to data compiled by the Mackinac Center for Public Policy, jobs in states with lower income taxes are up 5.7% above their pre-pandemic levels. In states with higher income taxes, job numbers have only increased by about 2% since the pandemic. Michigan is even farther behind, with the state still 0.6% below its pre-pandemic job numbers, according to the latest payroll jobs data from the Bureau of Labor Statistics.

House Bill 5399 was referred to the House Government Operations Committee.

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