Who pays more? The case for a fairer income tax


A fairer tax system in Michigan could reduce taxes for 95% of filers while bringing in additional revenue to fund our vital services, invest in roads and schools and create an economy that works for all Michigan residents. It’s time for Michigan to join the other 33 states that have a fair income tax structure (some-times called graduated or progressive).

What is a graduated income tax? In a graduated income tax structure, like the federal income tax, those with higher levels of income are taxed at a higher rate and those with lower incomes pay less. Under such a structure, taxpayers in similar economic circumstances pay similar amounts of tax.

Michigan’s Tax System  = Unfair

Michigan currently has a “flat tax” of 4.25%. People say our income tax is “fair” because everyone pays the same percentage of their income. But when coupled with other taxes, such as sales taxes, our tax system unfairly punishes those at lower incomes by making them pay more while those at the top pay less.

Why is the Fair Income Tax Smart?

It could give most people a tax cut while providing additional funding for essential state services.

Cutting taxes for workers with lower incomes helps local businesses as these people spend their tax savings, putting money back into the economy.

Taxes should be based on the ability to pay, with those at the top able to pay a greater share without suffering.

A fairer income tax would help offset other taxes in which those at the bottom pay more than those at the top.

Michigan’s Constitution requires a flat tax; to get a fairer tax system, the Constitution must be changed through a ballot proposal. A graduated income tax has been on the ballot three times in the past, 1968, 1972 and 1976, but it has failed each time. However, new polling suggests that views have changed, with Michigan residents supporting a graduated income tax 66% to 25%, with support from nearly every demographic. Michigan voters should have another opportunity to support this fairer tax.