Some of you may remember that we filed a lawsuit on behalf of individual taxpayers, business groups and lawmakers against Michigan Treasurer Rachel Eubanks. The treasurer had announced earlier this year that the 5% tax cut Michigan residents received for 2023 (thanks to a 2015 law) would be temporary and that the rate would go back up in 2024.
The treasurer made this announcement after Attorney General Dana Nessel issued an opinion that said the tax-cut trigger, which lowers taxes when the state’s revenue outpaces inflation by a set amount, was not intended to create a permanent cut.
In response to our lawsuit, the office argued that if the attorney general did misinterpret the law, only the Legislature could fix that misinterpretation. This logic is odd, as a key responsibility of the court is to interpret laws and strike down those that are unconstitutional – a precedent established in 1803 by Marbury v. Madison.
The state’s brief also tried introducing procedural hurdles that would stop our challenge. At one point, the state argued that the Mackinac Center was both too early and too late in filing the lawsuit.
The Mackinac Center’s response brief addresses the state’s arguments and explains why the 2015 law clearly intends for the rate reduction to be permanent. It also emphasizes that lawmakers should be given revenue estimates that are as accurate as possible, which the state’s brief argued was not important. When lawmakers appropriate funds, it’s critical for them to know how much tax revenue they can budget for.
A second brief from the state brought another head-scratcher. In its latest brief, the attorney general’s office appears to downplay its original arguments from the March opinion, while still claiming the end result of a tax rate increase is the same.
We’re waiting for the court to rule. If we succeed, 4.9 million Michiganders will be spared a $714 million tax hike.
