Repeal Michigan State Income Tax? Patch Poll

Republican State Sen. Jack Brandenburg of Harrison Township plans to introduce a bill when the Legislature reconvenes next week to eliminate Michigan’s 4.25 percent income tax. Brandenburg says the bill is just a starting point in a conversation on how best to offer tax relief to Michigan residents and help turn around sluggish population growth, but it will leave a $9 billion hole in the budget, so the bill is sure to be met with opposition.

Brandenburg has borrowed from Gov. Rick Snyder a key catch-phrase — “relentless positive action” — to describe what it takes to put Michigan back on track economically after the disastrous recession. Eliminating the income tax would give Michiganders more disposable income to spend at the state’s businesses, Brandenburg said.

Michigan’s state income tax rate isn’t high when compared with other U.S. states. It’s the 39th highest, according to the Washington, D.C.-based Tax Foundation.

Snyder will have to be persuaded. He has already raised budget concerns, but Brandenburg says the revenue loss could be offset by an increase in the state’s 6 percent sales tax.

“I’ve heard a lot in the last six years that we are in the process of reinventing Michigan, and I’ve heard a lot about ‘relentless positive action,’ ” Brandenburg told The Detroit News. “I can’t think of anything more positive than letting people keep more of their paycheck in their pocket.”

Brandenburg said he’s not in a hurry to repeal the state income tax. “The whole thing needs to be vetted out,” he told the Detroit Free Press. “I’m not in a hurry, and I’m open to all suggestions.”

Seven other states have gotten rid of their state income taxes, and Brandenburg wants to look at the fiscal impact that has had. Those states are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

Snyder spokeswoman Anna Heaton told the Free Press that the governor is “always open to new ideas and welcomes the discussion on tax reform,” but wants more study on the proposal to make sure revenue lost can be replaced and infrastructure projects won't be delayed.

Scott Hagerstrom, who ran President-elect Donald Trump’s campaign in Michigan and is a candidate for state GOP chairman, told the Free Press Brandenburg “is on the right track” with a proposal he thinks will bring more jobs to Michigan.

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