On Thursday, July 10, the Board of State Canvassers revoked its previous approval of “Invest in MI Kids’” 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.
This constitutional amendment would add a 5% tax on annual taxable income exceeding $500,000 for single filers and $1 million for joint filers, with the revenue allocated to the state school aid fund.
This proposal represents a substantial tax increase that would more than double the income tax rate for many job creators, including tens of thousands of small businesses that pay taxes through individual income tax returns. Furthermore, these tax dollars would not be allocated to Detroit’s public or charter schools.
The Chamber is also very concerned that this measure would alter Michigan’s tax code in a way that harms the state’s economic competitiveness. Although the language refers to a “surcharge,” it is actually a graduated income tax that would establish a 9.25% bracket for many business owners.
The Chamber will continue to strongly oppose this damaging tax increase and will keep the membership updated on any additional tax hikes.