Great Lakes Wire

Small business representatives raised concerns at a Michigan Board of Canvassers meeting regarding the summary language for a proposed constitutional amendment that would introduce a graduated income tax in the state. Amanda Fisher, State Director of the National Federation of Independent Business (NFIB) in Michigan, testified before the board, requesting changes to the 100-word petition summary associated with the measure.

The proposal would implement an additional 5% tax on top of the current 4.25% rate for single filers earning over $500,000 and joint filers making more than $1,000,000. Fisher argued that this change would significantly affect small business owners.

“Based on IRS data, at least two-thirds of the payers of this new graduated income tax will be Main Street business owners,” Fisher testified. “By not including the impact on small businesses, the current language is misleading and deceptive. Michigan citizens deserve to know all the facts about this proposed amendment so they can make an informed, unbiased decision.”

Fisher explained that many small businesses are taxed at individual income rates rather than through separate corporate taxes. “It is not well known or understood by most people that the vast majority of small businesses pay business taxes at the individual income tax level,” she said. “For these small business owners, all of their net business income is taxed on the individual tax return of the owner, even if the owner draws no salary and takes no distributions of income. In truth, a large portion of the revenue derived from this tax will be on the back of small businesses.”

Fisher also acknowledged Board members Houskamp and Cordell for voting against approving the petition summary after concerns from NFIB and others were not addressed by sponsors or other board members. These concerns included explicitly stating "graduated income tax" instead of just "tax," including both components for a total rate of 9.25%, and removing any references to how potential revenue might be spent.

NFIB announced plans to encourage Michigan residents who support small businesses not to sign petitions supporting this constitutional amendment for placement on the 2026 ballot.