Michigan House Republicans
Rep. Alexander: Increased income tax rate will impact workers, families and state’s prosperity
RELEASE|January 11, 2024

State Rep. Greg Alexander, of Carsonville, today blasted Gov. Gretchen Whitmer’s selective framing of reforms that come with an income tax hike on working families across Michigan.

“The devil is in the details,” Alexander said. “Democrats needed to raise the income tax to balance their out-of-control spending with the current budget, and this year workers across our communities and the state will be keeping less of what they earn. This is a backwards approach that will cost workers and their families.”

Michigan’s individual income tax rate for people and small businesses went up Monday from 4.05% to 4.25% due to legislative maneuvering that shortchanged a promise to return more money to hardworking taxpayers. The income tax rate had been lowered last year due to a 2015 law that requires a reduction of the income tax if state revenue grew faster than the rate of inflation in any year beginning in 2023.

Alexander fought to preserve the income tax cut and its permanent nature – underscoring that Michigan will be at a clear disadvantage to compete for and retain jobs and residents by increasing taxes. Democrats originally included the income tax hike plan in House Bill 4001, the tax law the governor highlighted at a press conference Tuesday.

“Michigan started 2023 with a $9 billion surplus. One year later, that’s all gone and Democrats have committed to $82 billion in spending for the current fiscal year,” Alexander said. “With tax increases like these, we’re now seeing who is going to be paying for those decisions. It’s unfortunately going to be hardworking people in areas like ours who are going to see a lot of the budget spending going to areas with larger population centers.”

On Wednesday, a Republican proposal was introduced in the House that would immediately lower the state income tax rate to 3.9%. According to data compiled by the Mackinac Center for Public Policy, jobs in states that tax income at less than 4% are up 5.7% above their pre-pandemic levels. In states that tax income at 4% or higher, job numbers have only increased by about 2% since the pandemic. Michigan is even further behind, with the state still 0.6% below its pre-pandemic job numbers, according to the latest payroll jobs data from the Bureau of Labor Statistics.

“There is a clear road map to helping people who are struggling with their budgets,” Alexander said. “Asking them to give more to support state government’s budget is not going to help families, improve our economy or grow the state. We need sound solutions that respect taxpayers.”

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