Thirty-four states along with Washington, D.C. have graduated state income taxes where wealthy people pay a higher percentage than people who make less money. This is also how our federal taxes are configured. Michigan, however, does not. We are one of only seven states with a flat tax.
A recent EPIC-MRA poll shows that an astonishing 66% of Michigan voters would support this change, including a majority of Republicans. According to Democratic State Rep. Jim Townsend, we could raise an additional $700,000,000 of revenue in the state and still lower taxes for 95% of Michiganders.
There are three ways to put the issue before votes which is necessary because it requires a change to the state constitution. One is a statewide constitutional convention. This is very unlikely to happen. The second is a legislatively-referred constitutional amendment where two-thirds of the State Senate and two-thirds of the State House members vote to put it on the ballot. The final way is an initiated constitutional amendment which requires 10 percent of the total vote cast for all candidates for governor at the last preceding general election.
The second option, the legislatively-referred constitutional amendment, is already being worked on. On January 15th, State House member Jeff Irwin of Ann Arbor introduced House Resolution A calling for a graduated state income tax, something he has done every year since 2011. An identically-worded House Resolution K is also before the Tax Committee. In March Rep. Townsend introduced House Bill 4341 that lays out the specifics of the graduated tax structure. It is highly unlikely that these pieces of legislation will get the two-thirds votes in both chambers of our state legislature, however. The domination of the wealthy and the skewed influence of corporations all but ensure that it will never move out of the Committee on Tax Policy where it is now.
The third method, an initiated constitutional amendment, is a definite possibility. This would require gathering 315,653 petition signatures. Given the groundswell of support EPIC-MRA’s poll revealed, a concerted effort to gather the petitions could be successful.
Corporatists, of course, are outraged at the idea. The Michigan Chamber of Commerce calls is “class warfare legislation”. The Koch brothers-funded Mackinac Center contends that asking the top 5% of wage earners in Michigan to pay a slightly higher income tax will destroy our economy.
There is a reason that Republicans and corporatists fear this ballot initiative: it will bring Democrats to the polls in droves. Much like the increase in the minimum wage could have turned the tide in 2014 before Republicans shrewdly flanked it with an increase of their own, this is a widely-supported, populist initiative that could change the complexion of the state House from red to blue.
Watch this effort going forward. It could be a game changer for Democrats in Michigan while lowering the taxes of 95% of our citizens and increasing the state revenue significantly.
If you’re interested in finding out more about the ramifications of a graduated state income tax in Michigan, Rep. Townsend has a comprehensive overview HERE.
[CC image credit: Donkey Hotey]