LANSING – Michigan residents would play a greater role in financing the operations of the state, while businesses would pay significantly less under the tax proposals made Thursday by Governor Rick Snyder. And recognizing the political difficulty of approving the different proposals, Snyder is attempting a novel effort at forcing lawmakers to either take the entire proposal or dump it.

In a press conference, Snyder and Lt. Governor Brian Calley said since the business tax proposal would create a new corporate income tax, there was no reason why that plan and his sweeping changes to the personal income tax, such as taxing pensions, could not be included in one bill amending the Income Tax Act.

If that proposal holds up constitutionally (Article IV, Section 24 of the Constitution prohibits a bill embracing “more than one object”) then it could avoid the potential political problem for the administration of lawmakers approving the potentially popular business tax changes, but taking a pass on the more politically difficult proposals of voting to tax pensions.

Michigan residents have always paid more of the overall tax burden than corporations and other businesses in the state. That fact will be heightened dramatically with the competing series of proposed tax changes.

In recent weeks, some business lobbyists have said the trend nationally is for states to tax businesses less and individuals more, while Michigan has tended to try to impose fewer taxes on individuals. This series of proposals would seem to change that political equation.

Snyder had campaigned extensively on ending the Michigan Business Tax and replacing it with a 6 percent corporate income tax. He did not campaign on making some of the major changes to the income tax that were announced.

In defense of those changes, which would tax both public pensions for the first time and eliminate the large exemption for those with private pensions, as well as eliminate the senior citizen additional credit under the state’s homestead tax credit, Snyder said the intent was not to take anything away from individuals but to be sure that all people are treated equally.

He also justified a proposal to eliminate the Earned Income Tax Credit, saying doing so would help support revenues to finance Medicaid services for the poor.

The proposal for the corporate income tax follows the lines that Snyder had discussed in recent weeks. If enacted, it would mean Michigan has a lower corporate tax rate than any state in the Great Lakes region except Indiana.

It was also critical that a major tax change be made to Michigan because the total tax rate businesses were paying when the MBT, personal property tax and other taxes were calculated was in excess of 10 percent of their income.

The MBT would be eliminated under the proposal. Instead, a 6 percent income tax on “C” corporations only would be assessed.

Sole-proprietorships, limited liability companies and partnerships would not pay any tax, and Calley said that means some 95,000 companies would be exempt from paying the corporate tax.

The new tax would take effect in 2012, meaning the state would still rely on the MBT through the current fiscal year and for the first quarter of the 2011-12 fiscal year.

The proposal would also get rid of all tax credits and deductions now offered. Snyder said that would help end the state practice of “picking winners and losers.”

And Calley said fixing the state’s business tax system required that the credits be eliminated. Adding credits to the system is symptomatic of what was wrong with the state’s business tax structure, he said.

However, the state will continue to honor tax credits already awarded. That will include $25 million for credits awarded for films.

Calley said the administration would work with the Legislature to determine exactly how to maintain those existing credits under the new tax. Among the options he mentioned were attaching the old credits to the new tax and continuing to levy the MBT on those companies collecting a credit.

And the state will continue to provide a credit for personal property taxes paid by manufacturers, although it will have to develop a proposal to either reduce or eliminate the tax, Calley said.

Under the proposal, state revenues raised by business taxes would plummet from an estimated $2.17 billion this year to $748 million in fiscal year 2013.

More than offsetting those cuts would be the changes in the individual income tax.

The administration estimated that in fiscal year 2013 the income tax changes would raise $1.86 billion.

Beyond the previously leaked and controversial proposals on taxing pensions, the proposal would also reverse the income tax rate set the last time the Executive Office and Legislature were in the hands of Republicans: 3.9 percent. That rate was raised in 2007 to 4.35 percent, and it is scheduled to fall to 4.25 percent this autumn.

Under current law, the tax is to continue to fall annually until it returns to the 3.9 percent rate.

But Snyder’s proposal will not reduce the tax any further once it reaches 4.25 percent. Snyder said the state’s income tax is already very competitive.

Raising the most money under his proposal would be taxing public pensions and ending the exemption on private pensions. Calley said the administration believes that recent case law will back them in the proposal to tax public pensions even though an attorney general’s opinion from the early 1990s said doing so would impair those pensions in violation of the Constitution.

He also said that because Snyder will not propose to tax Social Security benefits, the average retiree will not see any income tax on the first $40,000 of income.

Snyder said while people will complain, taxing pensions is ultimately an act of tax fairness. There are many people who cannot live on their pensions alone and are working at jobs, and that income is taxed. Why should some elderly persons pay income tax and others not, he asked.

The problem of untaxed pensions will become greater as the state’s percentage of older residents will continue to grow, meaning more residents will avail themselves of state services without paying revenues.

But the state has used the tax-free status of pensions as an attraction for older residents, and some critics fear those individuals may move out of the state if they have to pay tax.

Likewise, for his proposal to eliminate the enhanced Homestead Property Tax Credit seniors can claim on their income tax. As it is now, eligible taxpayers get a credit of 60 percent on taxes paid above 3.5 percent of their income, but persons who are older than 65 get 100 percent. Age should not be the dominating factor there, Snyder said, calling for an 80 percent level for everyone.

Also, the maximum income that applies to the credit will be dropped to $61,000. Now the full credit applies up to $70,000 and is phased out up to $82,000.

Another major proposal, which had not been leaked, was that the personal exemption will be phased out on single taxpayers with incomes above $75,000 and on joint filers with incomes above $150,000.

While the state now bars a graduated income tax, some critics may charge the phaseout of the personal exemption would act as a type of graduated tax.

Snyder is also proposing ending the Earned Income Tax Credit, a move that has been blasted by Democrats and social services organizations as deliberately hurting the poor.

But Calley said the state’s EITC, being a percentage of the federal EITC, adds no more incentive for individuals to work than the federal credit already provides.

Ending the EITC also will help support revenues needed for the state match for the Medicaid program, Snyder said. Those programs are needed for low-income persons.

The tax plans will put the Republican legislative majoriti