Michigan needs a graduated income tax

I read with interest the City Pulse editorial in your Feb. 1 edition titled “Tax the Rich,” and I agree that changes Governor Whitmer has proposed, including expansion of the state’s Earned Income Tax (which I worked on since it was first introduced in 2006), changes to the “pension tax” and universal pre-school should be adopted.

However, your closing paragraph caught my attention. Your editorial makes the case for creating “a fair and equitable system of taxation that benefits low-and middle income families and eschews public subsidies for the wealthy.”

Michigan needs a graduated income tax if we’re going to have a such a system.

Today, a millionaire pays the same state tax rate (4.25 percent) as a single mom making $15,000 per year, or a married couple making $70,000 per year. That’s not right.

After payroll taxes such as FICA (Social Security and Medicare) and state and federal taxes are deducted, the price of a loaf of bread, a carton of eggs or a pound of ground beef represent a far greater portion of the disposable income of low and middle-class workers, than the millionaire. 

A graduated income tax is based on a household’s ability to pay. Those who make less pay a lower rate. Those who earn more pay a higher rate. 

Michigan is one of only nine states with a flat income tax and, while the flat tax is not only unfair, it is not capturing the economic growth that is occurring at the top of the income scale. 

This won’t be easy. Michigan’s Constitution prohibits a graduated income tax. But I believe, with proper messaging and real-life examples, the time is right for this fundamental and much needed change to our tax structure.