WeVote
Log In

Bill

Bill

SB 117

Individual income tax: rate; repeal of the personal income tax; provide for. Amends title & sec. 601 of 1967 PA 281 (MCL 206.601) & repeals pt. 1, pt. 3 & pt. 4 of 1967 PA 281 (MCL 206.1 - 206.532, 206.701 - 206.725 & 206.801 - 206.847).

2025-2026 Regular Session Introduced by Joe Bellino and 3 co-sponsors

Michigan bill would eliminate the state's personal income tax system, generating $10-12 billion annual budget shortfall without identified replacement revenue sources.

REFERRED TO COMMITTEE ON FINANCE, INSURANCE, AND CONSUMER PROTECTION
#individualincometax:rate
0
WeVote Research Nonpartisan
Bill Summary · SB 117

Legislative bill overview

SB 117 proposes to repeal Michigan's personal income tax system entirely by eliminating the tax rate provision and repealing major sections of the 1967 Michigan tax code that govern individual income taxation. The bill would remove the primary mechanism through which Michigan currently collects income-based revenue from residents.

Why is this important

Michigan's personal income tax generates approximately $10-12 billion annually in state revenue—roughly one-third of the state's general fund budget. Repealing it without identifying replacement revenue sources would create a significant fiscal gap that would require substantial cuts to education, healthcare, infrastructure, or other services, or implementation of alternative taxes.

Potential points of contention

  • Fiscal impact: No companion bill proposing replacement revenue sources has been identified; repealing the tax without revenue alternatives could force massive budget cuts across state programs
  • Equity concerns: Personal income tax is progressive (higher earners pay higher rates); replacement taxes (such as sales tax increases) tend to be regressive, potentially shifting burden to lower-income households
  • Implementation timeline: Complete tax code repeal is procedurally and administratively complex; transition period and enforcement mechanisms are unclear
  • Economic effects: Proponents argue elimination reduces tax burden and attracts business; opponents contend it destabilizes funding for public services that businesses depend on

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.