Michigan House Speaker Matt Hall (R-Richland Township) has proposed a nearly $5 billion per year property tax relief package that will be paid by a new, limited 6% sales tax on select services most used by tourists and high-income residents.
WLNS reports Hall called his plan “largest tax overhaul in Michigan history.” According to Hall, the state’s share of property taxes, along with the state real estate transfer tax and the personal property tax, would be eliminated. At the same time, utilities would be required to roll back rates by at least $1 billion and freeze them for a specific period.
To pay for this, Hall intends to generate $4.7 billion a year through a new sales tax on currently untaxed services. Hall identified these targets for the new tax as “limousines, country club memberships, private jets, marinas, tourist services, travel agencies, skiing, golf, eye services, newspaper publishing, performing arts, environmental consulting and political ads.”
“I think this will be the biggest tax reform in Michigan’s history, even bigger than Proposal A,” Hall said. “It’s a $270 million tax cut.”
Hall said he targeted the items for the new tax by avoiding products and services that most Michigan residents do not use. He pointed out that most working families “are not buying limousines and country club memberships and private jets and marinas,” adding out-of-state visitors would mostly be paining the taxes on tourism-related services.
Hall also noted no new taxes would be applied to “nail salons, barbers, landscaping, health care services, car repairs, childcare, veterinary services, dry cleaning, and streaming services.”
“What shocked me was you can exempt most of these services that regular people use, and you can still collect $4.73 billion,” Hall said.
Getting the plan passed will be a challenge – Republicans control the Michigan House but Democrats control the Senate and Gov. Gretchen Whitmer is a Democrat.
“I can’t see the Democrats wanting to vote against utility rate rollbacks. I can’t see them wanting to vote against property tax cuts,” Hall said. “They’re going to see it’s going to save the average citizen hundreds of dollars a year, and with the utility cuts, it’s probably thousands a year.”
