LANSING, Michigan – A proposed constitutional amendment in Michigan, dubbed the "Fair Share Surcharge," is drawing significant debate as proponents push for its inclusion on the 2026 ballot. The Mackinac Center, a free-market think tank, recently stated in a tweet that the surcharge "would crush economic activity without helping schools." This initiative, led by the "Invest In MI Kids" campaign, seeks to impose an additional 5% income tax on high-earning households to boost K-12 public school funding.
The proposed surcharge would apply to individual incomes exceeding $500,000 annually and joint incomes above $1 million, starting in the 2027 tax year. This 5% levy would be a marginal tax, impacting only the portion of income above these thresholds. Supporters argue that Michigan's current flat tax system disproportionately benefits the wealthy, and increased funding is necessary as per-pupil allocations have not kept pace with inflation.
However, critics like the Mackinac Center contend the tax hike would make Michigan's top income tax rate, including federal taxes, among the highest in the nation, potentially reaching 46.25% for top earners. They argue that despite a 31% inflation-adjusted increase in school funding from 2018-19 to 2023-24, Michigan's educational outcomes have not improved, citing a 44th ranking in fourth-grade reading. The organization suggests the added revenue would not translate into better school performance.
To qualify for the November 2026 ballot, the "Invest In MI Kids" campaign must gather 356,958 valid signatures within 180 days. The proposal recently faced scrutiny from the Board of State Canvassers, with opponents raising concerns about the summary of the initiative. The debate highlights a broader ideological divide over economic policy and public funding priorities within the state.
Opponents, including some business groups, label the proposal a "job killer" that could deter businesses and high-income earners from Michigan. They question the precise allocation and effectiveness of the funds, despite supporters framing it as a necessary step for public services. The outcome of this ballot initiative will significantly shape Michigan's economic and educational landscape in the coming years.