1. TAX EQUALITY
95% OF RESIDENTSWOULD RECEIVE ATAX CUT UNDER
A FAMILY MAKING $50,000WOULD SAVE $525 AYEAR
THEIRTAX RATEWOULD BE 3.2%VS.THE CURRENT 4.25%
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2. WHO PAYS TAXES IN MICHIGAN?
Ever wonder what percent of your income you pay in state and local taxes? Our system
for raising revenue at the state and local level is complicated — we have property
taxes, the sales tax, excise taxes like the fuel tax and the income tax.
So what’s your bottom line?When you add it all up, what percent of your income do
you pay in state and local taxes?
Well, it depends how much you earn each year. In Michigan, the more you make, the less you contribute of your income
in state and local taxes. Sound unfair? That’s because it is. When you add it all up, the bottom 80 percent of families,
those making $88,000 a year or less, contribute 9.2 percent to 9.5 percent of their income, while the wealthiest 1 percent
contribute only 5.9 percent. Why is our tax burden so unequal?
The wealthiest 1 percent contribute far less
than everyone else because Michigan relies
heavily on regressive property, sales and
excise taxes that disproportionately impact
the bottom 95 percent of families.
I haven’t found a single person who believes
this is a fair way to distribute our tax burden.
So what can we do?
We can equalize our tax burden by
establishing a graduated income tax that cuts
taxes for 95 percent of Michigan families and
asks the wealthiest to contribute the same
share of their income as everyone else.
This plan would make a real difference in the
lives of Michigan families who have been
getting hit from every angle — declining
income, reduced benefits, rising costs and
disproportionately higher taxes.
Under this plan, a family of four making less
than $176,000 would receive a tax cut that
would reach as high as $600 per year for
middle-income families.
More than 4.4 million filers would receive an
$830 million tax cut to stimulate economic
growth and create jobs.
Additionally, 89 percent of business owners
would receive a tax cut. It’s time to help
hardworking small-business owners who
don’t benefit from special-interest deals like
the MEGA business tax credits.
9.210
0
5
1
2
3
4
6
7
8
9
9.59.5 9.5
8.5
7.8
5.9
Sales & ExciseTaxes
PercentofHouseholdIncome
Household Income & Percentage of Households
IncomeTaxes PropertyTaxes
Percent of Household Income Contributed in State and LocalTaxes
6.3
3.9
5.0
3.1
2.3
1.6 .8
1.1
3.1
2.5
3.5
3.6
3.7
3.5
1.8 2.52 2.9
2.6
2.5
1.6
20%
$0 to $21k
20%
$21 to $40k
20%
$40 to $64k
20%
$64 to $100k
15%
$100 to $185k
4%
$185 to $430k
1%
$430,000+
Source: Institute onTaxation and Economic Policy
Michigan Under Current Law
6.3
3.9
5.0
3.1
2.3
1.6 .8
8.810
0
5
1
2
3
4
6
7
8
9
8.88.8 8.8
8.1 8.3 8.9
Sales & ExciseTaxes
PercentofHouseholdIncome
Household Income & Percentage of Households
IncomeTaxes PropertyTaxes
Percent of Household Income Contributed in State and LocalTaxes
2.4
1.8
2.8
3.2 4.2
6.5
1.8 2.52
2.9
2.6 2.5
1.6
.7
20%
$0 to $21k
20%
$21 to $40k
20%
$40 to $64k
20%
$64 to $100k
15%
$100 to $185k
4%
$185 to $430k
1%
$430,000+
Source: Institute onTaxation and Economic Policy
Michigan UnderTax Equality