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Summary of Bill & What It Means to You
SB 20 (Zorn): The legislation would expand the allowable use of “Sinking Funds” to be used for the purchase of school busses. Sinking Funds are a special pots of resources a school district can request from taxpayers to use for very limited, capital improvements to real property. Sinking funds are funded by local property tax millages.
OPPOSE: The Michigan Constitution is clear that all school operating expenses must be covered by state taxes distributed to local districts not by locally approved property tax millages. This was a change made under Proposal A adopted by voters in 1994 to help stop property taxes from increasing at an out of control pace. By allowing sinking funds to cover school bus purchases the principal of disallowing local millages to cover school operating expenses would be violated. What’s next? Covers employee salary and benefits from sinking funds? This type of mission creep would eventually put Michigan on a course backwards when property taxes were rising at untenable rates.
HB 4288: This legislation is expected to save businesses organized as s-corporations, partnerships, limited partnerships, limited liability partnerships and limited liability companies almost $200 million in taxes per year.
Business types listed above, commonly referred to as “passthrough” businesses, will be able to fully deduct their state and local taxes (SALT) from their federal income under changes made in HB 4288 thereby, significantly reducing their federal tax liability. Because the legislation shifts the tax away from an individual and to the business entity, taxpayers can get out from underneath the federal $10,000 cap on SALT deductions.
SJR C (Irwin): This joint resolution would eliminate Michigan’s longstanding, fair, flat income tax and replace it with one with a graduated one. A flat rate income tax is when with one tax rate applying to all incomes. A graduated income tax rate, also called a progressive tax, is a tax structure that levies increasingly higher tax rates on higher-earning individuals or businesses. Essentially, under this kind of system: the more you make, the more you pay.
SB 20 (Zorn): The legislation would expand the allowable use of “Sinking Funds” to be used for the purchase of school busses. Sinking Funds are a special pots of resources a school district can request from taxpayers to use for very limited, capital improvements to real property. Sinking funds are funded by local property tax millages.