Does Talk On State Needing New Revenue 'Frame The Moment' For Tax The Rich Proposals?

(Source: MIRS.news, Published 07/08/2025) Talk in Lansing right now about possibly creating new revenue for the government to fund schools or other services is helping "frame the moment" for tax-the-rich efforts, says Rachelle Crow-Hercher of the Invest In MI Kids ballot proposal committee. 

The Invest in MI Kids ballot effort wants to subject taxpayers earning more than $500,000 – or more than $1 million for married couples – to an extra 5 percent tax to be deposited into the School Aid Fund. Right now, backers of the effort are waiting for the State Board of Canvassers to approve their petition form before they can begin collecting signatures. 

On this week's episode of the MIRS Monday Podcast, Crow-Hercher said volunteers will hit the ground running "as soon as the printers can have sheets in our hot little hands." She said about 700 volunteers have been certified with circulator training. 

"People are frustrated that they are continuing to pay more and more out of their middle-class and working incomes and not getting the services and the return that we used to," she said. "We know that folks (at) $500,000 and above are paying a lower percentage in overall taxes than the rest of us. Their effective tax rate is lower than the rest of us. … Are they ultra-rich? No. Are they paying their fair share in taxes? Also no." 

The ballot effort comes at a time when legislators and the Governor's office are exploring new avenues to create state revenue, like new taxes and fees. 

For example, the Governor wants any state taxes paid at the fuel pump by motorists to go toward road upgrades. However, doing so would result in a sales tax on gas no longer going toward the School Aid Fund and local government revenue sharing. 

To make up for losses in the School Aid Fund and other areas, the Governor wants to subject the marijuana industry to the same wholesale taxes as cigarettes, as well as to tax "Big Tech industries" transporting heavy weights on Michigan roads and "bombard" residents with "nuisance pop-ups and ads." 

House Republicans have been resistant to the conversations on creating new revenues, instead wanting to significantly downsize the state's budget for special economic development projects and grants to businesses. However, the Michigan Chamber of Commerce informed MIRS last month that it's "hearing rumblings" of the state's corporate income tax being increased to pay for road upgrades.

"I think that back-fill conversation is certainly helping us frame the moment. I think the overall moment is that schools in Michigan are in a crisis," Crow-Hercher said. "What's happening in Lansing is just like another thing that adds to the narrative for us that we need to look at and invest and make sure that every student in Michigan is getting the education that they deserve, and that we are prioritizing paying for that." 

The Invest In MI Kids committee had a presence Monday night at a panel on Congress' passed Medicaid reforms in Oakland County, hosted by Reps. Sharon MacDonell (D-Troy) and Natalie Price (D-Berkley) and Sens. Mallory McMorrow (D-Royal Oak) and Stephanie Chang (D-Detroit). More than 110 people were in attendance, and were handed fliers about Invest In MI Kids as they entered the room.

All four legislators predicted seeing the state needs to create new forms of revenue on the horizon. Chang said she was fully supportive of the initiative. 

"I'm hopeful that (it) will be successful. That is something that would be hugely helpful if we can actually basically create this wealth tax to actually support our education budget, and if we fully support our education budget, then what other things (could) we fully support?" Chang said. 

McMorrow – a 2026 candidate for U.S. Senate – said she's learned from the state Treasury that Michigan has been operating with the same revenue, with the same level of tax dollars coming in since 1968 when adjusted for inflation, despite gaining more than 3 million residents since then.

"I hear from a lot of residents who say 'I am already getting taxed too much,' 'my property taxes are too high,' and that is very well and true," McMorrow said, mentioning possible new state spending obligations if Michigan receives fewer Medicaid dollars. "We've been trying to cut our way to prosperity for decades, and now with this budget, we're going to be in an even deeper hole." 

During a June episode of the MIRS Monday Podcast, Michigan Chamber of Commerce President Jim Holcomb described the Invest in MI Kids proposal as damaging and political gamesmanship. 

He said he's had several conversations already this year with out-of-state chamber leaders and elected officials who said the proposal's existence has made recruiting businesses and people away from Michigan easier. 

"We need to cut taxes," Holcomb said. "If the supporters of this proposal were actually concerned about education, they'd be in the Capitol working on issues. What they're doing is trying to reach into your wallet, and they're going to kill small businesses and kill our communities in the meantime."