Speaker: Not So Fast On Income Tax Wipe Out
- Jul 10
- 2 min read
While reducing property taxes remains top of his "to-do" list, House Speaker Matt Hall (R-Richland Township) is wading into the debate over the total elimination of the state income tax with a resulting $13 billion hit to the state budget.
His observations come as the three remaining Republican gubernatorial candidates promise to do that if elected.
"I don't think you can eliminate the income tax in one year, but I do think you can do it over several years," he told TV-6 News during a Zoom exchange this week.
The income tax remains the main source of revenue to fund state governments around the country, with only eight states, including Florida, not having one.
The economic folks are telling the Speaker as he studies this, "if you get under 4%, that's viewed favorably and competitive. Maybe under 3% is when you really start to see economic growth. So I think the goal would be to get it like 3% and then if you can go further, I'd go further."
The replacement revenue is the key question for the special interest groups in town, but with the phase-out strategy, Hall believes there is money in the current budget that "will help to soften the blow as we work toward lowering the income tax for a future governor."
Hall then signaled that major changes would be on the way.
"Some of these department heads would have to give up some of the functions in their departments in order to make the kind of change that you're talking about and I believe that would take several years, but I do believe it is possible," he said.
It appears that GOP candidate John James (R-Shelby Township) is the only one of the three candidates to embrace what the Speaker is advocating. He would take a 25% slice out of the income tax the first year "with the goal of getting rid of it entirely." Candidates Mike COX and Perry Johnson have endorsed the removal, as well, but have apparently not addressed the phase-out aspect of this debate.
It should be noted that all of this rests on which party is controlling the legislature and the governor's office next year. A democratic governor, the popular wisdom goes, would not embrace the elimination of the income tax. If a Republican governor is elected, the policy change would be difficult if either the House or Senate were controlled by Democrats.
