Some Michigan lawmakers have backed a joint resolution to have voters decide whether the state’s highest earners should pay more in taxes.
The proposal seeks to charge an extra 5% tax on annual income above $500,000 for single filers, or $1 million for joint filers. The tax would only kick in on income above those thresholds. That extra revenue would go toward schools, health and human services, housing, and water infrastructure.
State Senator Stephanie Chang (D-Detroit) said the money could come in handy as economists predict tough years ahead for the state budget.
“I think it’s important that, as lawmakers, we keep talking about those priorities and also talk about how, if we make the wealthy pay their fair share, we can create another revenue source that can help generate over a billion dollars,” Chang said.
Critics of the proposal have argued it might not just be the rich who could end up paying more in taxes if it were to pass. That's because of how many small business owners file their tax returns.
Chang said that’s a conversation worth having, but it’s clear that some residents should be paying more.
“Let’s talk about those details, let’s talk about what are some potential options there. But, in the meantime, I think that we really need to talk about just sort of balancing the scales in terms of who is burdened by our tax system,” Chang said.
The resolution is a follow-up to the Invest in MI Kids ballot measure that sought to amend the state constitution to create a similar new tax structure. That effort failed to collect enough signatures to get before voters.
Unlike Invest in MI Kids, the new proposal would be allowed to fund more than just education-related purposes. It would also explicitly create an exception to Michigan’s ban on a graduated tax system to make room for what the resolution calls a “surcharge.”
To get on the November ballot, the resolution would need supermajorities in both chambers of the Michigan legislature to approve it. That’s unlikely to happen, especially in divided government, with Democrats in control of the state Senate and Republicans controlling the House.
