Article IX
Sec. 7:
No income tax graduated as to rate or base shall be imposed by the state or any of its subdivisions.Beginning January 1, 1977, any state-wide tax on the income of natural persons shall be related to income in the following manner:
That portion of a person’s state taxable income that is equal to or less than $20,000.00 shall not be taxed at a rate greater than 3.9%, hereafter referred to as the fair share maximum rate. In defining state taxable income, the Legislature shall allow an exemption of at least $1,500.00 for each taxpayer and dependent. The Legislature may allow other exemptions, credits, and deductions. Taxable income of $20,000.00 plus $1,500.00 for each taxpayer and dependent shall be referred to hereafter as the fair share tax base, as shown in the chart below:
| Taxpaying Family | Fair Share Base | Fair Share Maximum Rate on Taxable Income |
| 1 person | $21,500.00 | 3.9% |
| 2 persons | $23,000.00 | 3.9% |
| 3 persons | $24,500.00 | 3.9% |
| 4 persons | $26,000.00 | 3.9% |
| 5 persons | $27,500.00 | 3.9% |
| 6 persons | $29,000.00 | 3.9% |
| 7 persons | $30,500.00 | 3.9% |
| | and so on. | |
The fair share maximum rate of 3.9% shall not be increased prior to January 1, 1978, and the fair share base shall not be decreased prior to January 1, 1978.
Tax revenues lost by the State of Michigan through the implementation of this Section during the period prior to January 1, 1978, shall be raised by increasing the rate on that portion of a natural person’s state taxable income in excess of $20,000.00.
During September of each year the State Revenue Commissioner shall adjust the $20,000.00 taxable income figure for the following calendar year by applying to it an inflation factor for the purpose of maintaining approximate stability in terms of January 1, 1977 dollars.
