Michigan Democrats revisit plan to tax high earners through constitutional amendment

New tax plan returns to Lansing

Democratic lawmakers in Michigan revived a high-earner tax proposal by seeking a constitutional amendment tied to public services, household needs, and another revenue source for defined public uses.

State Senator Stephanie Chang and State Representative Tonya Myers Phillips, both Detroit Democrats, introduced the plan July 14, with ballot status unresolved during legislative review among state lawmakers.

Income thresholds shape the plan

The proposed 5% surcharge would start in 2027 for residents with income above $500,000, setting one threshold for individual filers if the plan advances through formal legislative review.

Couples with income above $1 million would fall within the plan, while earnings below each threshold would avoid the extra surcharge if voters approve the amendment in Michigan.

Revenue would follow set uses

The plan directs new revenue toward pre-K-12 education, childcare, health and human services, housing, and water infrastructure if voters later approve the constitutional change under the proposed framework.

That spending list broadens the earlier school-only concept, adding state service categories if the proposal advances through required legislative steps before possible voter review on a November ballot.

A coalition backs the push

Groups listed with the announcement include 482Forward, Rising Voices, MI United, the Michigan League for Public Policy, and the Michigan Education Justice Coalition, among organizations identified with the proposal.

Other participants include AFT Michigan, the Michigan PTA, Detroit Action, and Invest in MI Kids, linking the proposal with an earlier education funding petition effort in the state.

Earlier petition effort informs debate

Invest in MI Kids sought a constitutional amendment for a related surcharge, with revenue limited to public education through the State School Aid Fund, as proposed.

That campaign did not reach the 2026 ballot, so Chang and Myers Phillips returned through a legislative route instead of launching another petition drive for the new proposal.

Constitutional route matters

Michigan’s Constitution bars income taxes graduated by rate or base, so the plan seeks a constitutional amendment instead of an ordinary tax bill through the regular legislative process.

A constitutional change would need voter approval after legislative clearance, keeping the proposal conditional before any surcharge begins in 2027 under the plan’s drafted start date for implementation.

Fun fact: Michigan became the 26th state in 1837, and its admission to the Union remains a defining moment in state history.

Legislative math sets the hurdle

Michigan joint resolutions proposing constitutional amendments require support from two-thirds of elected and serving members in both chambers before reaching voters at an election set under state law.

That rule complicates the tax plan because Republicans hold the Michigan House, while Democrats control the Senate under the chamber makeup in place for 2026 during legislative review.

Little-known fact: The United States first collected income tax during the Civil War from 1862 to 1872, before permanent federal taxation arrived.

Surcharge design limits reach

The surcharge would target only income above the listed thresholds, not every dollar a filer earns, under the structure described publicly for review by state lawmakers and residents.

That distinction matters for households near the line because the extra charge would apply only after income crosses $500,000 or $1 million, depending on filing status under the plan.

Dedicated uses frame the debate

The resolution would dedicate money to listed categories, giving the proposed surcharge narrower uses than broad general fund revenue if voters approve the amendment at a later election.

Those limits connect the tax question with schools, childcare, housing, water systems, and health and human services without naming one program for all future revenue from the surcharge.

Education funding remains central

Michigan Education Justice Coalition Director Rachelle Crow-Hercher linked the proposal to school funding needs and broader budget concerns during the renewed tax debate over revenue options for public services.

Her point focused on public education obligations, while the resolution covers more service areas than the earlier Invest in MI Kids petition for schools and related funding uses.

Business filing concerns remain

Some critics of similar proposals have warned that certain business owners may face higher taxes because many report earnings through personal returns rather than corporate filings in Michigan.

Chang treated that concern as a detail for discussion, while arguing Michigan should review tax burdens if lawmakers continue considering the measure through the amendment process during formal review.

Ballot status remains unresolved

The plan remains before the Michigan Legislature as a formal proposal, not an approved amendment or confirmed question for the November ballot, during continued review by state lawmakers.

Any final path depends on legislative votes, possible election placement, voter approval, and later implementation rules for tax collection and dedicated spending if the measure advances through the process.

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Further action depends on votes

Further formal action would depend on whether leaders schedule hearings or votes, since no surcharge can reach voters without supermajority support in both chambers under Michigan’s amendment process.

The proposal leaves lawmakers weighing whether top earners should fund defined public uses through a constitutional amendment rather than regular budget choices alone during Michigan’s tax policy debate.

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Do you think Michigan Democrats’ proposal to tax high earners through a constitutional amendment is the right approach to funding public services? Share your thoughts.

This slideshow was made with AI assistance and human editing.

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