New ballot campaign seeks higher taxes for higher-income earners in Michigan

Craig Mauger Beth LeBlanc
The Detroit News

Lansing — Organizers of a new ballot proposal campaign said Friday they'll seek a constitutional amendment this year to change Michigan's 4.25% flat income tax rate so higher-income earners pay a higher rate than lower-income earners.

State lawmakers would have to enact a law reducing the income tax rate for individuals making less than $175,000 a year by 2022, according to proposed language unveiled by the group Michiganders for the Commonwealth on Friday. Meanwhile, lawmakers would also have to create tax rates that increase based on income levels and produce more than $1.5 billion in additional net revenue by 2023.

A campaign called Fair Tax Michigan announced an effort on Friday, Feb. 28, 2020, to institute a graduated income tax in the state.

The campaign, which is using the name Fair Tax Michigan, turned in its proposed petition language for a graduated income tax to the Board of State Canvassers on Friday, an initial step in launching a ballot proposal.

To get the proposal before voters in November, supporters would have to collect 425,059 valid petition signatures by July 6, 129 days from now. That timeline is shorter than the 180-day period allowed under the law that most campaigns use.

"In the last 40 years, our schools have crumbled, our roads are nearly unrecognizable and Michigan went from being known as a Water Wonderland to being known for the Flint Water Crisis," said Eli Isaguirre, campaign manager of Fair Tax Michigan, in a statement. "While the politicians in Lansing argue over what to do, our campaign is offering a solution that is fair for everyone and gets things done for once."

According to the campaign, 90% of Michigan residents would see a tax decrease under the proposal.

The Michigan Constitution bans a graduated income tax. Rich Studley, president and CEO of the Michigan Chamber of Commerce, blasted the idea of changing the policy.

A proposed graduated income tax would send a message to businesses, executives and skilled workers to “get the hell out of Michigan” at a time when leaders are working to attract and maintain jobs, Studley said.

The bid for new revenue comes as Democratic Gov. Gretchen Whitmer and the GOP-controlled Legislature are working on a more than $60 billion state budget, the largest in the state’s history, Studley said.

"It will have a devastating impact on the state’s economic competitiveness," he said of the potential ballot proposal. "This appears to be a really dangerous scheme to provide for a giant expansion of state government at taxpayer expense."

This is an example of the petitions that Fair Tax Michigan hopes to circulate in support of bringing a graduated income tax to the state. The group launched its effort on Friday, Feb. 28, 2020.

Under the new proposed language, if the Legislature can't enact a graduated income tax proposal, Whitmer would have the power to issue an executive order to do so. The governor's budget officials have argued that the current tax system doesn't generate enough money to fund services for taxpayers. 

If approved, the newly created revenue would be split between schools and public infrastructure, according to the proposal, which bars lawmakers from offsetting the increases in school funding with reductions in appropriations from other funds.

Isaguirre said multiple groups are supporting the ballot campaign, which he described as a "grassroots" effort. He specifically mentioned 482 Forward, an education organizing network in Detroit.

The group's official fundraising committee formed on Feb. 10. Asked if the campaign would pay individuals to collect petition signatures, which is often a strategy that campaigns use to meet the signature threshold, Isaguirre said organizers hadn't decided.

The plan is to be a grassroots army of people taking to other about why the proposal matters, he said.

If successful, Michiganders for the Commonwealth could join other groups in getting proposals before voters in November. Other campaigns are seeking signatures to ban discrimination based on sexual orientation and gender identity in Michigan and increase restrictions on lobbyists in Lansing.