Drumbeat for a Graduated Income Tax Getting Louder; Chamber Strongly Opposed

September 3, 2019

Another piece of legislation to impose a graduated income tax on Michigan taxpayers was introduced last week in the Michigan Senate. Unlike the flat income tax Michiganders enjoy today where one rate is imposed on everyone, with a graduated income tax, the tax rate rises as a taxpayer’s income goes up.

Senate Bill 459 would impose a graduated income tax as follows:

PROPOSED GRADUATED INCOME TAX
Single FilersJoint FilersRate
$0 - $20,000$0 - $40,0003%
$20,000 - $40,000$40,000 - $80,0004%
$40,000 - $80,000$80,000 - $160,0005%
$80,000 - $125,000$160,000 - $200,0006%
$125,000 - $200,000$200,000 - $250,0007%
$200,000 - $500,000$250,000 - $500,0008%
$500,000 - $1,000,000$500,000 - $1,000,0009%
$1,000,000 +$1,000,000 +10%

Currently, Michigan’s income tax is 4.25% for all taxpayers no matter what income level.  

The Michigan Chamber opposes creating an income tax that punishes success. Creating several different tax rates according to income is an obvious mechanism to redistribute wealth. In addition to punishing success, a graduated income tax diminishes the entrepreneurial spirit. 

For more information, contact Dan Papineau at dpapineau@michamber.com.