Whitmer, Michigan Democrats want to send $180 'inflation relief' checks to taxpayers

LANSING, Mich. (FOX 2) - Governor Gretchen Whitmer wants to send $180 ‘inflation relief’ checks to all Michigan taxpayers. 

Part of a larger plan from state House and Senate Democrats that includes proposals to rollback the retirement tax and boost the earned income tax credit, Whitmer made the announcement alongside House Speaker Joe Tate (D-Detroit) and Senate Majority Leader Winnie Brinks (D-Grand Rapids).

The three Democrats said the proposal amounted to thousands of dollars in savings.

"This is the largest tax break in decades," Whitmer said Monday morning.

Last week, Democrats released the details of their Lowering MI Cost plan, which included three facets:

• Repealing the retirement tax, which would amount to savings of $1,000 a year for senior households
• Boosting the Working Families Tax Credit, which would amount to $3,150 in tax returns to low-income residents
• Sending $180 tax rebate checks to residents, which would come from the state's general fund

The plan still needs to pass both chambers of the legislature before taking effect. 

The checks would be sent for each income tax filing - meaning a couple that filed jointly would receive one check. 

Michigan Republicans have pushed for a broader tax relief plan by lowering the state income tax from 4.25% to 4.05%. Instead of a check that gets added to one's bank account, the savings would come in the form of less income being taxed at the end of the year.

That tax cut plan would cost the state about $600 million a year.

RELATED: New Whitmer plan would send inflation relief checks to all state taxpayers

Michigan could afford the lost revenue after accounting for a billion dollar surplus in the budget. However, Democrats have expressed worry that the loss in money would hurt the state in five to six years when the surplus runs out.

The tax rebate checks amount to $800 million in money leaving the general fund.

Democrats' other proposed changes impact more than a million households in Michigan. Their proposal to phase out the retirement tax would take place over four years, sending a thousand dollars back to an estimated 500,000 households. A version of the bill has passed both the state House and Senate.

The other piece of the tax policy push would to increase the Earned Income Tax Credit from 6% to 30%, adding up to $3,150 per tax refund. The extra money would help an estimated 700,000 families, "directly impacting nearly one million kids" the governor's office said.