Michigan lawmakers are proposing a resolution for voters to decide if the state’s highest earners should face an additional 5% tax on income exceeding $500,000 for single filers and $1 million for joint filers. This tax would apply only to income above these thresholds, with the generated revenue directed towards schools, health services, housing, and water infrastructure.
State Senator Stephanie Chang (D-Detroit) emphasized that this additional revenue could be crucial given predicted budget challenges. She stated the importance of a fair tax contribution from wealthier residents, suggesting that it could potentially generate over a billion dollars.
However, some critics argue that small business owners, who often file their taxes similarly to high-income individuals, might also be impacted negatively. Chang acknowledged the need for discussions on this topic but affirmed that some residents should contribute more to balance the tax system.
This resolution builds on the failed “Invest in MI Kids” ballot measure, which sought a similar tax structure but did not gather enough signatures for voter consideration. Unlike that proposal, the new resolution would accommodate funding for broader purposes and include an exception to Michigan’s ban on graduated tax systems for what it proposes as a “surcharge.”
To appear on the November ballot, the resolution requires supermajorities from both chambers of the Michigan Legislature, a challenging task given the current divided government, with Democrats controlling the Senate and Republicans the House.
