Late last week, a ballot committee, called Michiganders for the Commonwealth, submitted language to amend Michigan’s constitution to eliminate the state’s single rate income tax. The proposal would require the Legislature and the Governor to implement the “Fair Individual Income Tax” by June 1, 2021 to be effective January 1, 2022.
The new income tax would have the following requirements:
- Reduce the income tax rate for individuals with an annual income of $175,000 ($350,000 joint) or less.
- Must have more than one marginal tax rate that increases by income level.
- The tax must produce $1.5 billion in new revenue.
- Disallow any legislation from reducing the amount of revenue currently brought in by the income tax plus $1.5 billion until January 1, 2025.
- After January 1, 2025, the Legislature would need 2/3 majority vote to amend the State’s income tax
The proposal grants the Governor the authority to impose an income tax, as described above, by executive order if the Legislature and Governor cannot agree on legislation that meets the guidelines. New revenue from the graduated income tax would be split between public schools and public infrastructure.
The Michigan Chamber opposes the elimination of the state’s single rate income tax and will actively work to defeat this proposal. Punishing success and entrepreneurism will send our state’s economy backwards. A flat rate income tax is fair. The more you make, the more tax you pay. Creating different and increasing rates as income levels rise is punitive and does nothing more than redistribute wealth.
For more information, contact Dan Papineau at dpapineau@michamber.com.