7/10 Update: On Thursday, July 10, the Board of State Canvassers revoked its previous approval of a graduated income tax increase ballot proposal. This decision was based on the work by the Detroit Regional Chamber and the business community to highlight procedural errors the Board had made at its earlier meeting when it initially approved the language. This is a win today, but it is expected that the proponents of this idea will appear before the Board again soon.
On June 27, the Michigan Board of Canvassers hastily approved summary language for two significant ballot proposals that would have an immense negative impact on the state’s business climate.
The first ballot proposal would impose an additional 5% tax on annual taxable income over $500,000 for single filers and $1 million for joint filers, with the revenue directed to the state school aid fund.
This proposal represents a significant tax hike that would more than double the income tax rate for many job creators, including tens of thousands of small businesses that pay business taxes through individual income tax returns. The Chamber is deeply concerned that this measure would rewrite Michigan’s tax code in a way that damages the state’s economic competitiveness. While the language refers to a “surcharge,” it is, in fact, a graduated income tax that would create a 9.25% bracket for many business owners. The Chamber will continue to vigorously oppose this harmful tax increase.
Canvassers also approved language for a referendum to repeal Public Act 1 of 2025, which established a gradual increase in the minimum wage and supported tipped employees through a bipartisan compromise. The Detroit Regional Chamber-supported law brought certainty to the restaurant and lodging industry after a 2024 Michigan Supreme Court ruling threatened to eliminate the tipped wage.
A repeal of PA 1 would decrease the minimum wage from the levels set in the public act. For example, in 2026, the minimum wage would fall from $13.73 to $13.29. The referendum would, however, significantly increase the tipped worker wage, eventually bringing it to 100% of the full minimum wage by 2030.
The Chamber believes that repealing PA 1 would reintroduce significant uncertainty for the restaurant industry and undermine a hard-fought bipartisan agreement and urges members and the public to decline to sign petitions for this misguided referendum.
The next step for both ballot proposals, should no other legal challenge amount, would be signature gathering across Michigan.