LANSING, Mich. (Michigan News Source) – After several other legislators called for a hold on tax increases, Representative David Martin (R-Davison) put forth a proposal to reduce the income tax for the future of Michigan. 

A large component of the plan entails repealing the recently enacted state income tax rate increase from 4.05% to 4.25% on the first of the new year. 

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“Lowering Michigan’s income tax to 3.9% is a step toward a brighter future for our state,” said State Rep. Martin. “It’s about giving families a break while boosting our state economy. Jobs are flourishing where taxes are under 4%, and that’s where we should aim to be. My plan will give struggling families some breathing room and fuel Michigan’s growth.” 

Returning to the precedent.

In 2007, legislators approved a temporary increase in the state income tax rate from 3.9% to 4.35%, and was not reduced again until 2012 down to 4.25%.  Despite a temporary decrease down to 4.05% in 2023, new policies under the Democrat majority legislature raised the tax back up for 2024. 

Research supporting the bill.

Data from the Mackinac Center for Public Policy indicates that states with income taxes lower than 4% are increasing jobs at a faster rate than states with income taxes at or above 4%.  

“Reducing the income tax should be seen as an investment in Michigan’s workforce,” said State Rep. Martin. “Lower taxes mean more spending power for families, circulating money back into our local businesses and fueling job creation. It also attracts businesses looking for a friendly environment, spurring job creation and setting the stage for sustained economic growth.”

Other legislative calls for tax rate ceilings.

Last Friday a report from the Consensus Revenue Estimating Conference indicated that the state is expecting higher revenue for the next few years, prompting some legislators to call for tax limits, including State Representative Sarah Lightner (R-Springport). 

“The latest revenue estimates clearly show that there’s absolutely no reason to impose higher taxes on the people of Michigan,” said Rep. Lightner, Minority Vice Chair of the House Appropriations Committee, in a statement. “Even without the governor’s tax increase, there’s enough revenue coming into the state to fund education and other essential services in the budget.”

Democrat leadership on tax policies.

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Speaker of the House Joe Tate (D-Detroit) called Michigan’s economic outlook “stable and healthy.” 

“Today’s revenue estimating conference confirmed that the work done by the Democratic majority has kept our economy moving in the right direction,” said Speaker Tate at the conference last week. 

When asked about tax cuts, Governor Gretchen Whitmer shared that she did not foresee any proposals on that front. 

“I think our house is in good order,” Gov. Whitmer said last week. 

Michigan’s population council releases initial report.

After several months of gathering constituent input, the Growing Michigan Together Population Council released its initial findings, reporting Michigan is ranked as 49th for population growth, just ahead of Alaska. 

“We have reached two milestones on the road to recovery—an in-depth analysis of the challenges we face and a set of actionable recommendations to regain our competitiveness,” the report said. “A third milestone still lies ahead of us—ensuring momentum through constructive debate and shared commitment— which will be a critical determinant of success. The milestones and recommendations should be seen as an intertwined system to drive healthy growth—all needed to achieve long-term impact.”

The report also detailed how Michigan’s median income was once 114 percent of the national average, though today it is ranked 34th in median income among U.S. states. 

The council acknowledged that the loss of workers has affected the state’s tax base and recommended that the legislature reassess the current tax policies and “propose balanced adjustments to better utilize existing state and local resources.” 

“Consider revenue-generation strategies,” the report suggested, “If it is found that after redesigning, rebalancing, and maximizing existing resources that additional revenue is needed to ensure long-term recommendation success, the legislature and governor should consider new tax proposals carefully, balancing inflation pressures with the need to secure our future.” 

The full report can be found here.