A report recently issued by the  Michigan League for Human Services shows that businesses in Michigan will benefit from new tax cuts from the state while individuals will end up paying more. 

According to the report’s author Joanne Bump, low income families will be hit the hardest, she said, citing an analysis of the state’s tax policies prior to changes made by the new administration. 

The report notes that low income families pay a higher percentage of their income in state and local taxes than higher income families, a total of 9.1 percent compared with just 5.6 percent among those at the highest end of the financial spectrum. 

Low income residents also pay more than in sales taxes as a share of income than higher income taxpayers do as well. Bump says that the changes will likely only make the situation for low income citizens worse as opposed to helping them.                    

Other issues that add to the burden on lower income families cited include the reduction of tax credits or elimination of them, the loss of exemptions for seniors, and changes to the Homestead Property Tax Credit. Bump recommends that a low-income sales sales tax credit be created along with an adopted graduated income tax, an extension of the sales tax to services, and a restoration of the 20 percent Earned Income Tax Credit. 

According to reports, the new tax package going into effect mostly in 2012 will lead to a 23 percent increase in individual income taxes. 

Snyder has said that the changes take aim at tax inequalities that are hostile to job growth, and called them a defining moment in the state’s turnaround.