LANSING, MI — Should higher earners pay higher income tax rates?
Replacing Michigan’s flat income tax with a graduated version could reduce rates for a majority of taxpayers but generate new revenue for the state by raising rates on the wealthy, according to state Rep. Jim Townsend.
Townsend, D-Royal Oak, is promoting the potential tax policy change in the wake of last week’s historic voter rejection of Proposal 1, which would have raised the state sales tax as part of a complex plan to fund road repairs.
“People have a feeling some are not paying their fair share and some are getting a special deal — and they happen to be right,” Townsend said.
The Michigan Constitution expressly prohibits a graduated income tax. All filers currently pay a 4.25 percent tax on income regardless of how much they earn. MORE