Long Reach: 2007 Michigan Income Tax Hike Has Taken $2,823 From Median Household

Thanks to a “temporary” state income tax hike imposed by Gov. Jenifer Granholm in 2007, approved by a Democratic House and Republican Senate, the state of Michigan has extracted about $11.7 billion more from households than it otherwise would have.

In the years since, Lansing has collected $2,823 more from the median Michigan household because of this increased rate.

In the current year, that 2007 tax increase will relocate an additional $1.09 billion from Michigan households to Lansing, compared to what people otherwise would have paid.

In 2007, lawmakers raised the state income tax rate from 3.9% to 4.35%. The tax hike law they passed included a promise to gradually return the rate back to 3.9% by 2015. But in 2012, the Legislature approved a slight reduction to 4.25%, where the rate remains today.