Will Small Businesses In Michigan Get Hit With Another Tax?

Imagine your older cousin who makes tons of cash suddenly being told they have to pay almost double in taxes—just for being successful! That’s Michigan’s big idea: a new “surcharge” that hits rich people…but also small business owners. Now business groups are panicking louder than a cat in a room full of laser pointers.

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Here are Five Fast Facts on a potential new business tax in Michigan:

1. 🚀 Tax Rate Leap - If you earn over $500K alone or $1 million with your spouse, your tax rate jumps from 4.25% to about 9.25% - like graduating from the kiddie slide to a skyscraper!

2. 🤕 Small Business Impact - The catch is that many family-owned shops and businesses are taxed on owners’ incomes, so they’d get hit too. Twice the tax, twice the ouch.

3. 🗳️ Ballot Battle Brewing - The state Board gave the summary an initial “thumbs-up” (on a 3–1 vote), but opponents argued they fudged the wording. Bickering ensued, so it’s temporarily paused until July.

4. 🫣 7th Highest - If this passes, Michigan would become the 7th highest-income-tax state, and the highest in the Midwest by a mile. Not exactly the kind of thing you want to brag about, right?

5. 🏫 Big Bucks for Schools (Maybe) - Supporters say this could raise $1.7 billion - money that “might” go to schools. Critics argue that just dumping cash in won’t fix classrooms unless reforms happen, too. Also, there's that little key word "might…”

🔥Bottom line: So Michigan is deciding whether to charge the wealthy -- and a lot of small business owners -- a hefty tax to (maybe) fund schools. Business groups are screaming, “You’ll scare people away!” Meanwhile, supporters say it’s their “fair share.” The next steps? Petition signatures, board reviews, and eventually a vote, probably in 2026. Buckle up - it’s about to get political (and slightly dramatic)!

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What do you think about this tax increase idea?

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