Typical Household Has Lost $1,134 To 2007 Michigan Income Tax Hike

Despite GOP control, ‘temporary’ income tax hike has still not been rolled back

A Michigan milestone passed last fall with no official fanfare: Oct. 1st, 2017, was the 10th anniversary of an 11.5 percent rise in the state income tax. The increase was enacted by a Democratic governor, a Democratic-controlled House, and a Republican-controlled Senate.

Many news stories at the time reported that the income tax rate increase from 3.9 percent to 4.35 percent would generate about $600 million in 2007. They described this as a modest change: A family making $50,000 a year would pay less than $350 a year extra.

But it adds up. As a result of that tax hike in 2007, the people of Michigan have paid $7.1 billion to $8.3 billion more to Lansing than they would have without the tax hike. These figures come from an analysis by James Hohman at the Mackinac Center for Public Policy.

Hohman found that a typical household with the median income of $45,981 as of 2011 would have kept an extra $1,134 by now if that tax hike had not been approved.

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