Michigan Gov. Gretchen Whitmer announced a $180 inflation relief as direct checks that would be sent directly to taxpayers as part of a new tax relief package proposed by the local government.

The direct checks will come alongside a long-awaited rollback of taxes on retirement income and the expansion of the Earned Income Tax Credit. During a press conference on Monday, Whitmer said that the combination of cuts resulted in the "largest tax break in decades" as Michigan is looking at a potential surplus of more than $9 billion.

Michigan's $180 Direct Checks

The governor noted that the revised retirement tax cuts would equalize the exemptions for public pensions and private retirement plans. Lawmakers from the left are also looking to expand Michigan's match of the federal Earned Income Tax Credit from 6% to 30%.

Whitmer also said that the changes, if approved, will be implemented retroactively for this tax year and noted that the overall plan was dubbed "Lowering MI Costs." At the conference, Senate Majority Leader Winnie Brinks said that the latest proposal reflects what Democrats have been working to deliver: lowering costs, fighting rising inflation, and providing immediate relief for residents, as per MLive.

Brinks added that the direct checks would be handed out to taxpayers this spring, but a specific timeline has not yet been announced. To move the process forward quickly, Democrats need to find support from two-thirds of the Michigan Senate, which amounts to six Republican votes.

However, the biggest uncertainty with the latest proposal remained unclear after the press conference. This is whether or not Democrats plan to distribute the funds in a way that would prevent the possibility of an automatic decrease in the state income tax.

Addressing the concern, Senate Minority Leader Aric Nesbitt said that Democrats continue to push plans that pick winners and losers and think that one-time financial assistance replaces ongoing tax relief.

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Alleviating the Effects of Inflation

A spokesperson for Whitmer, Bobby Leddy, said that the total cost of the checks would amount to roughly $800 million and come from the general fund. According to the Detroit Free Press, authorities noted that one check would be issued for each income tax filing in 2023.

This means that a couple filing jointly would receive one $180 check, not two, a spokesman reiterated. Furthermore, the taxpayers who are eligible to file income tax returns but do not owe any taxes to the state will still be able to receive the one-time payments.

The Michigan governor, joined by House Speaker Joe Tate and Brinks, detailed the proposed size of the checks. She said that too many families were suffering because of rising inflation that cut into their daily expenditures.

Brinks noted that with the state's surplus, the local government is in a position to help the people offset some of the costs they have. On the other hand, Tate noted that none of the items in the tax relief package should surprise lawmakers who are set to vote on the proposal in the following days, said The Detroit News.

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