State Rep. Donni Steele, R-Orion Township, is calling for action on a recently introduced Republican plan that would immediately reduce the state income tax rate to 3.9% to help families struggling to keep up with the high cost of living. 

Monday marked the first day 2023 tax filings could be submitted. Filers in Michigan may see a higher-than-expected 2023 return stemming from a Republican-passed law lowering the state income tax rate from 4.25% to 4.05%. The tax relief was intended to be permanent. However, Lansing Democrats undercut the plan in 2023 and successfully pushed for taxes to go back up in 2024.

“Higher incomes, less taxes should be the vision for Michigan,” said Steele, who serves on the House Appropriations Committee. “Prices are so high that people must choose between breakfast or lunch because they can’t afford both. Families walk around their homes in four shirts because they can’t afford to raise their heat higher than 60 degrees. The middle class doesn’t need subsidies for electric vehicles; they need their hard-earned tax dollars back in their pockets.”

The Republican plan, House Bill 5399, would follow through on a promise to restore the rate to 3.9 percent after it was raised during Gov. Jennifer Granholm’s administration in 2007.

As part of a legislative deal to avoid a government shutdown, then-Gov. Granholm and state lawmakers agreed to temporarily increase the state income tax rate. The pledge at the time was for the tax rate to fall back the original level by 2015, but it never happened. The state income tax rate was later reduced in 2012 and temporarily dipped to 4.05% in 2023. Under Democrat leadership, the tax rose to 4.25% in 2024.

 “I taught my kids to keep their promises; now the state needs a lesson in integrity,” Steele said. “The income tax rate was supposed to go down in 2015. Nine years later, the commitment to tax relief still hasn’t been met. We’re looking at a huge budget surplus again this year. People want and need their money back.”

According to data compiled by the Mackinac Center for Public Policy, jobs in states with lower income taxes are up 5.7% above their pre-pandemic levels. In states with higher income taxes, job numbers have only increased by about 2% since the pandemic. Michigan is even further behind, with the state still 0.6% below its pre-pandemic job numbers, according to the latest payroll jobs data from the Bureau of Labor Statistics.

House Bill 5399 was referred to the historically unproductive House Government Operations Committee.

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