A version of this column originally appeared in Bridge Michigan.
Neva Butkus
Monique Stanton
At the beginning of 2022, the national Institute on Taxation and Economic Policy (ITEP) forecasted the “tax cut fever” that has been sweeping through state legislatures across the nation — including here in Michigan, with the Legislature’s passage last week of a major, permanent and unsustainable cut to the personal income tax.
As ITEP noted, most state budgets are flush with cash due to billions in federal aid and a rebounding economy, positioning state policymakers to make transformative investments in programs, such as healthcare, education and infrastructure that will help communities rebound from the ongoing pandemic. Unfortunately, most state legislatures are instead opting for premature, myopic tax cuts that will inevitably widen racial inequities and erode public services that are still reeling from cuts due to the Great Recession.
Current state surpluses are deceptive and fleeting. Many states lowered revenue estimates at the beginning of the pandemic, making surpluses appear larger. States pushed back tax filing deadlines amid the chaos which, while helpful for some families, means the 2020 and 2021 tax returns of some households will be counted in the same year. State health department budgets are being propped up with higher match rates for Medicaid dollars. Stimulus payments and unemployment insurance boosts helped increase spending and, therefore, state sales tax collections.
Last week, the Republican-led Michigan Legislature passed Senate Bill 768, their own tax cut proposal framed as helping all residents. But significantly cutting the personal income tax rate really prioritizes tax cuts for the wealthy while having little to no impact on everyone else.
Based on data from ITEP requested by the Michigan League for Public Policy, reducing the Michigan personal income tax rate to 3.9 percent would mean an average tax cut of:
- $12 for the lowest 20 percent (less than $23,000) of earners;
- $92 for the middle 20 percent ($41,000-$70,000) of Michigan workers; and
- A whopping $4,901 for the top 1 percent (making $539,000 or more) of Michigan earners.
Based on these estimates, Michigan’s lowest earners will barely get enough money to buy a single pizza while the state’s wealthiest residents will get a tax break big enough to pay for a round-trip flight to Italy, where pizza was invented. ITEP’s analysis also found that 69 percent of the tax cuts will go to the wealthiest 20 percent whereas only 31 percent of the benefits flow to the bottom 80 percent of Michigan workers.
This reckless bill will also come with an immediate revenue hit of around $3.1 billion, and an ongoing annual cost of around $2.4 billion. Without Gov. Gretchen Whitmer’s veto, this bill will result in drastic budget cuts, meaning larger classroom sizes, increased barriers to healthcare access, and more potholes leading to higher car repair bills. This proposal will also jeopardize vital federal aid provided under the American Rescue Plan Act, dollars intended to help struggling workers, families and businesses recover from the economic impacts of the pandemic.
State budgets have the power to reduce disparities, promote racial and economic justice, and bridge political divides, especially with our current one-time surplus and federal aid. Gov. Whitmer’s budget includes a number of proposals to improve equity in the state, including increasing the Michigan Earned Income Tax Credit (EITC), making major investments to support students and schools with the greatest needs, and improving housing access, healthcare, assistance programs and other support for struggling families. A broad tax cut to drastically reduce state revenue will negatively affect our state’s ability to provide for its residents for years to come.
Claiming that tax cuts will make state economies more competitive and will spur economic growth are short-sighted and unfounded. States that cut taxes after the Great Recession often saw slower economic growth than the nation as a whole, while simultaneously worsening racial inequities. Meanwhile, the loss in state revenue can jeopardize a state’s ability to fund vital public services that all Michiganders need to thrive like K-12 schools, water infrastructure, public health services, broadband access, and more.
Tax cuts cannot be a solution to everything, especially at a time when the richest Americans are amassing more wealth than ever. Surges in state revenue are temporary, and are particularly so right now with the pandemic and the related influx of federal support. Prematurely pulling the trigger on state income tax cuts for the wealthy will not grow a state economy. It will only jeopardize a state’s ability to create thriving communities now and down the line.
Jay Cutler joined the League in March 2026 as the Kids Count Senior Data Analyst, where he collects, analyzes, and prepares data for Kids Count in Michigan.
Danielle Taylor-Basemore joined the League as the Development Data and Stewardship Coordinator in June 2025. She brings with her five years of nonprofit experience with a special focus on community engagement, data visualization and strategic programming. Prior to joining the League, Danielle served as the Business District, Safety, and Digital Manager at Jefferson East, Inc.
Scott Preston is a Senior Policy Analyst with the Michigan League for Public Policy, where he leads the organization’s immigration and criminal justice reform portfolios. In the three years prior to joining the League, Scott facilitated the Southeast Michigan Refugee Collaborative and managed a small business economic development program at Global Detroit. His work included launching Michigan’s first Refugee Film Festival and building on a trusted connector model that linked marginalized communities with crucial resources. Scott’s work at the League is informed by his background in journalism and research. He spent four years covering the Syrian refugee crisis in the Middle East for publications such as The Economist, and later worked with unaccompanied refugee minors through Samaritas. Scott holds a master’s degree in international migration and public policy from the London School of Economics and Political Science.
Kate Powers joined the League as the Chief Development Officer in February 2025. Prior to joining the League, Kate held leadership positions at many Michigan nonprofit organizations, most recently serving as the COO and Chief Development Officer of Ele’s Place. Kate has spent the bulk of her career in fundraising, with a short stint in the state Legislature as a legislative aide to members in both chambers. Kate is a graduate of Michigan State University’s James Madison College with a Bachelor of Arts in Social Relations and has a certificate in fundraising management from the Lilly Family School of Philanthropy at Indiana University. Additionally, Kate served on the East Lansing Public Schools Board of Education and is a past President of the Junior League of Lansing. In her free time, she enjoys traveling with her husband and her son and saving outfit of the day and home decor ideas on Pinterest. 
Nicholas Hess joined the League as the Fiscal Policy Analyst in September of 2024. In this role, Nicholas focuses on tax policy, government revenue, and their impact on working families and racial equity, including the effects of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Nicholas values the role that judicious fiscal policy can play in the improvement of people’s lives and the economy, alleviating inequities along the way.
Audrey Matusz joined the League as the Visual Communications Specialist in September 2024. She supports the team with implementing social media strategies and brainstorming creative ways to talk about public policy. She brings with her nearly a decade of experience in producing digital products for evidence-based social justice initiatives. 
Jacob Kaplan 
Donald Stuckey 
Alexandra Stamm 
Amari Fuller
Mikell Frey is a communications professional with a passion for using the art of storytelling to positively impact lives. She strongly believes that positive social change can be inspired by the sharing of data-driven information coupled with the unique perspectives of people from all walks of life across Michigan, especially those who have faced extraordinary barriers. 
Yona Isaacs (she/hers) is an Early Childhood Data Analyst for the Kids Count project. After earning her Bachelor of Science in Biopsychology, Cognition, and Neuroscience at the University of Michigan, she began her career as a research coordinator in pediatric psychiatry using data to understand the impacts of brain activity and genetics on children’s behavior and mental health symptoms. This work prompted an interest in exploring social determinants of health and the role of policy in promoting equitable opportunities for all children, families, and communities. She returned to the University of Michigan to complete her Masters in Social Work focused on Social Policy and Evaluation, during which she interned with the ACLU of Michigan’s policy and legislative team and assisted local nonprofit organizations in creating data and evaluation metrics. She currently serves as a coordinator for the Michigan Center for Youth Justice on a project aiming to increase placement options and enhance cultural competency within the juvenile justice system for LGBTQIA+ youth. Yona is eager to put her data skills to work at the League in support of data-driven policies that advocate for equitable access to healthcare, education, economic security, and opportunity for 0-5 year old children. In her free time, she enjoys tackling DIY house projects and trying new outdoor activities with her dog.
Rachel Richards rejoined the League in December 2020 as the Fiscal Policy Director working on state budget and tax policies. Prior to returning to the League, she served as the Director of Legislative Affairs for the Michigan Department of Treasury, the tax policy analyst and Legislative Director for the Michigan League for Public Policy, and a policy analyst and the Appropriations Coordinator for the Democratic Caucus of the Michigan House of Representatives. She brings with her over a decade of experience in policies focused on economic opportunity, including workforce issues, tax, and state budget.
Simon Marshall-Shah joined the Michigan League for Public Policy as a State Policy Fellow in August 2019. His work focuses on state policy as it relates to the budget, immigration, health care and other League policy priorities. Before joining the League, he worked in Washington, D.C. at the Association for Community Affiliated Plans (ACAP), providing federal policy and advocacy support to nonprofit, Medicaid health plans (Safety Net Health Plans) related to the ACA Marketplaces as well as Quality & Operations.
Renell Weathers, Michigan League for Public Policy (MLPP) Community Engagement Consultant. As community engagement consultant, Renell works with organizations throughout the state in connecting the impact of budget and tax policies to their communities. She is motivated by the belief that all children and adults deserve the opportunity to achieve their dreams regardless of race, ethnicity, religion or economic class.
Emily Jorgensen joined the Michigan League for Public Policy in July 2019. She deeply cares about the well-being of individuals and families and has a great love for Michigan. She is grateful that her position at the League enables her to combine these passions and work to help promote policies that will lead to better opportunities and security for all Michiganders.
Megan Farnsworth joined the League’s staff in December 2022 as Executive Assistant. Megan is driven by work that is personally fulfilling, and feels honored to help support the work of an organization that pushes for more robust programming and opportunities for the residents of our state. She’s excited and motivated to gain overarching knowledge of the policies and agendas that the League supports.
