By Associated Press - Wednesday, January 3, 2018

LANSING, Mich. (AP) - Michigan’s treasurer differs with a prominent economist’s characterization of the new U.S. tax law’s effect on state income taxes.

Treasurer Nick Khouri said Wednesday he has a “technical disagreement” with economist Patrick Anderson, a former state deputy budget director. Khouri says the legislature must act to prevent an “unintentional” state tax increase spurred by the federal overhaul, while Anderson contends the new law won’t lead to a hike.

Anderson says the federal law doesn’t eliminate a $4,050 personal exemption, but sets it to zero for several years. The law is explicit, he says, in saying the reduction shouldn’t be taken into account for other purposes.

Khouri says state law stipulates taxpayers get the number of exemptions on their federal forms. He adds dealing with that discrepancy will require more than a policy directive by his department.

The Snyder administration plans to make recommendations related to the exemption issue next week at a next revenue-estimating meeting.

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