M Live
Feb. 11, 2025
Gov. Gretchen Whitmer’s road funding plan is bad for business, according to the Detroit Regional Chamber.
The regional business organization contends the proposed corporate income tax increase would hurt Michigan businesses.
Related: Proposed Corporate Income Tax Increase Will Hurt Michigan Businesses
Unveiled Monday, Feb. 10, Whitmer’s plan would add about $3 billion in new road funding each year. This would be accomplished by increasing the corporate income tax, taxing wholesale marijuana sales, cutting unspecified programs and shifting all taxes at the pump to road funding.
The corporate income tax increase alone would generate about $1.6 billion each year, according to Whitmer’s office.
Whitmer’s office declined to specify the amount the 6% corporate income tax would need increase to generate $1.6 billion more in revenue.
It’s the proposed corporate tax increase that Detroit Regional Chamber officials took issue with.
Detroit Regional Chamber officials say Whitmer’s proposal would increase the corporate income tax to 8%, putting Michigan among the states with the highest corporate income taxes in the nation.
“This increase penalizes the entire economy and creates a new challenge for doing business in Michigan,” Detroit Regional Chamber officials said. “While the Detroit Regional Chamber thanks Whitmer and Speaker Hall for seeking a long-term solution for road funding, that conversation needs to focus on user fees instead of giving more reasons to do business elsewhere.”
Whitmer’s office framed the proposed tax increase as requiring corporations to pay their fair share and help rebuild roads proportionally to the damage they cause.
“Governor Whitmer’s plan will ask massive corporations and Big Tech industries, such as Amazon, X (formerly known as Twitter), Facebook, and TikTok, led by the nation’s wealthiest individuals, pay their fair share to do business in Michigan and use Michigan roadways,” the governor’s office said. “Currently, Michigan laws have not been updated to account for Big Tech industries that profit tremendously from using Michigan’s infrastructure.”
The corporate income tax is levied on C-corporations. Some examples of C-corps include Target, Walmart, Amazon and McDonald’s.
But it’s not just behemoth chains, retailers and tech companies that would be affected by the proposed tax increase.
According to the Detroit Regional Chamber, 87% of C-corps have fewer than 100 employees, and C-corps in Michigan employ half of the state’s private sector workforce.
This means about half of the state’s population will be “subject to budget cuts, decreased wages and reduced spending power,” according to Detroit Regional Chamber officials.
The Detroit Regional Chamber is the third largest chamber of commerce in the U.S., representing thousands of businesses across the Detroit Metro region.
Whitmer’s road funding plan needs to be negotiated with lawmakers, including the Republican-majority Michigan House, for it to be implemented.
House Republicans, led by Speaker Matt Hall, R-Richland Township, have introduced a competing long-term road funding plan that they say will raise $3.14 billion in annual revenue for roads without raising taxes.
The plan relies on shifting all taxes at the pump to roads and using funds from the Corporate Income Tax, but without raising the tax itself.
Jim Holcomb, president and CEO of the Michigan Chamber of Commerce, said his organization has concerns about increasing the corporate income tax and what that could mean for Michigan’s competitiveness in attracting and keeping jobs and businesses.
Holcomb said the Michigan Chamber doesn’t necessarily oppose any new or increased tax to fund the state’s roadways. But, he said, lawmakers should first ensure there aren’t savings or unnecessary expenditures in the budget that can be used first.
“We want to make sure a tax is necessary,” Holcomb said. “We think there has to be more money in roads, absolutely, but we want to make sure that we’re using current resources. When you have over an $80 billion budget, we just want to make sure that the current resources are being properly allocated and then have a conversation of how best to move forward.”
The Detroit Regional Chamber pointed out that Whitmer’s proposed corporate income tax increase will add to other impending changes that “will likely harm Michigan’s business climate and attractiveness.”
Chief among those are the minimum wage increase from $10.56 an hour to $12.48 and new employee sick time requirements that will take effect Feb. 21 unless lawmakers stop or amend them.
Other areas of concern are the Trump administration’s tariffs on Chinese imports, and promised ones on Canada and Mexican goods, along with an increase in unemployment benefits signed into law by Whitmer earlier this year, the Detroit Regional Chamber said.
“Make no mistake, infrastructure improvement is a critical priority for the state, and one the Chamber and MichAuto continues to champion,” Detroit Regional Chamber officials said. “However, if there are serious intentions to find sustainable solutions for road funding, the conversation needs to center on existing revenue sources for roads and spending cuts that can compensate for the budget shortfall.”
MichAuto is an affiliate of the Detroit Regional Chamber.
Over the past seven years, 16 states have cut their corporate income taxes, the Detroit Regional Chamber said.
At 8%, Michigan would be tied for the 14th highest corporate income tax in the U.S., according to the Tax Foundation.
House Appropriations Committee Chair state Rep. Ann Bollin, R-Brighton Township, said Monday the state doesn’t need to increase taxes or create new ones to fix the roads.
“The governor’s claim that Michigan doesn’t have enough existing revenue to fix our roads is simply false,” Bollin said in a statement. “Just last month, the House introduced a responsible, $3.1 billion plan that prioritizes road repairs using existing revenue, without raising taxes. But instead of working with us, Gov. Whitmer is pushing a plan that would raise taxes and fees on Michigan families by $2.5 billion, inflating her already massive $83.5 billion budget to a staggering $86 billion.”
In addition to the corporate income tax increase, Whitmer’s plan would generate $3 billion in new road funding revenue through taxing wholesale marijuana sales, cutting unspecified programs and shifting all taxes at the pump to road funding.
The governor’s office declined to share working estimates for how much the new wholesale marijuana tax would be but said it would generate $470 million. That tax would be paid by businesses, not customers.
Shifting all taxes at the pumps to road funding would not increase the taxes paid by customers. It would generate about $1.2 billion in revenue.
The School Aid Fund, which receives about $650 million from the sales tax on gas, would be made whole, according to Whitmer’s office.
Whitmer’s office said negotiations will determine what programs will be cut to generate about $500 million in revenue, adding that the governor does not have any specific programs or funding areas in mind.