Taxpayer Alert: Graduated Income Tax Movement Forming in Michigan

July 29, 2019

An organized effort is underway to impose a graduated income tax on Michigan taxpayers. As reported in the Detroit Free Press last week, Governor Whitmer confirmed that an unnamed coalition is laying the groundwork for a 2020 ballot proposal that would amend the Michigan Constitution to impose a graduated income tax -- essentially doubling the income tax rate for any individual earning more than $75,000 per year or for joint taxpayers earning more than $150,000.

Currently, Michigan enjoys the constitutional protection of a flat, 4.25% income tax rate for all earners. A graduated income tax sets higher tax rates for higher earning individuals. This type of unfair tax structure punishes success and suffocates the entrepreneurial spirt. Doubling the income tax on small businesses organized as passthroughs, who pay the profit from their businesses through their personal income tax, will be especially hard hit under a graduated income tax. Passthrough businesses will be forced to invest and hire less. All around, a massive tax increase as proposed through a graduated income tax would crush the State’s economy like a 10-ton wrecking ball.

The Free Press article rightfully identifies the Michigan Chamber as one of the leading organizations to fight a graduated income tax. The article states: the “most notable (opposition) is the Michigan Chamber of Commerce, widely considered to be the state's most influential business lobbying group.”

For more information on this or other tax-related issues, contact Dan Papineau at