Advocacy News – Jan. 22, 2026
What’s happening: A new independent analysis from the nonpartisan Tax Foundation, commissioned by the Michigan Chamber of Commerce Foundation, evaluates the economic impact of the ‘Tax the Rich’ | Invest in MI Kids ballot proposal to change our state’s Constitution and impose a graduated income tax in Michigan.
Why it matters: Despite being promoted as a tax on only the most wealthy, the study from this widely recognized state and federal tax policy expert, finds the proposal would severely impact small businesses structured as pass-through entities – the heart of Michigan communities and economy – and results in fewer jobs, lower wages and reduced competitiveness.
By the numbers:
- At 9.25% would join the ranks of highest marginal income tax rates in the country – behind states like California and New York.
- And higher than every surrounding Midwest competitor. For contrast, Indiana’s rate is 2.95% and Ohio comes in at 2.75%.
- Result in 43,000 fewer jobs, drop wages 1% and cost $8.5 billion in lost economic growth.
- Increase business and talent outmigration at a time when Michigan is already struggling with population loss.
- The top five states Michigan residents leave for are states with low (or no) state income taxes: Ohio, North Carolina, Texas, Florida and Arizona.
What we’re saying: In a joint statement with several other business organizations, we warned the proposal would disproportionately harm small employers, family-owned businesses and entrepreneurs, undermining job creation and long-term growth – and that we can’t afford to weaken the economic opportunity that supports our schools, families and communities alike.
Key takeaway: Tax policy like this is never as narrow as the slogans suggest and can have sweeping, unintended consequences. Michiganders deserve the facts and entire economic impact picture.
Listen in: Want to go deeper into the data behind the headlines? On our latest episode of the MI Business Matters podcast, Chamber President & CEO Jim Holcomb sits down with Jared Walczak, lead analyst and author of the Tax Foundation study, to break it all down.
Go deeper: Read the full Tax Foundation study and MI Chamber joint statement. Contact Randy Gross with questions or for more information.