Would Killing Income Tax Make Michigan A Population Magnet?

(Source: MIRS.news, Published 05/15/2026) Rep. Matt Maddock (R-Milford) asked the state demographer Friday during the Consensus Revenue Estimating Conference (CREC) if killing Michigan's income tax could bring 1 million people back to the state.

The question came after lawmakers were told Michigan's aging population (declining births and long-term migration struggles) could slow the state's population growth or push it into a decline.

Demographer Jaclyn Butler fouled off the Maddock knuckleball, saying Michigan has seen some migration recovery in the 2020s. However, that has been offset by a natural decrease: more deaths than births, she said.

“If we eliminated our income tax in Michigan, how long would it take us to get a million people back here?” Maddock first again.

Butler said she does not do policymaking or policy-related analysis.

“Could you guess? What would it take in order to reverse our population decline, to get people back to Michigan? Would it take six months or a year if we eliminated our income tax?” Maddock furthered. “It's my understanding and belief that we will be a magnet to people coming to Michigan.”

He said the state “should probably have another four to five million people” if it had growth similar to comparable states and argued eliminating the income tax would be a huge positive for attracting more people.

Butler again said she could not comment on policy, but told Maddock she could provide an overview of population trends in other states, including states with no or lower income taxes.

The presentation that sparked this question painted a bleak picture of Michigan's population trajectory.

According to Butler's presentation, Michigan's population has hovered around 10 million since 2000, with the state's trajectory flattening over the last 25 years because of declining births, rising deaths and uneven migration. She said Michigan had about 208,000 births at the peak of the baby boom in 1957, compared to about 99,000 in 2024.

Michigan also pivoted into natural decrease in 2021 for the first time in the state's recorded history since at least 1900, Butler said. The state has now had five consecutive years of more deaths than births, putting downward pressure on population growth.

Butler said that Michigan's recent population gains from 2020 to 2025 were driven by total net migration being high enough to offset those years of natural decrease. Though the state's recent domestic migration improvements, she said, appear to be more about fewer people leaving Michigan than a major increase in people moving in.

“In the short term, Michigan's potential population growth is sensitive to migration,” Butler said.

She said Michigan's population aging is pronounced compared to other states, with baby boomers still the largest generation in Michigan. The state's median age of 40.1 ranked the 13th highest in the nation in 2020 and is projected to remain higher than the national median through 2050.

With that, she said that Michigan has two major aging pressures: a large baby boom generation at the top of the age distribution and not enough replenishment among younger age groups through births or young adult migration.

That could continue to affect the labor force, schools and tax revenues. About 80 percent of Michigan school districts have experienced enrollment reductions since 2009, Butler said. And the state's 5-to 17-year-old population is projected to keep declining through 2050.

She also warned that if Michigan has fewer working-age residents over time, the state could have fewer people paying income tax and less revenue tied to payroll jobs.

Also in her presentation, the state needs to begin preparing for the 2030 census, which will affect federal funding, state revenue sharing, transportation funding and congressional representation. Michigan faces several headwinds heading into the count, including declining response rates in federal surveys and the state's unprecedented stretch of natural decrease.

“This is the first time in Michigan's recorded history where the state had even one year of natural decrease heading into a census, let alone five,” she said.

The U.S. Census Bureau’s local address update operation begins as early as next year, Butler said, and she is meeting with local governments across the state to encourage them to prepare.

“My goal is for our state to hit the ground running when LUCA (Local Update of Census Addresses) operations start next year,” Butler said, “so that we can have a strong, strategic and streamlined LUCA submission and position our state for a strong 2030 census.”

Asked by MIRS after CREC if Maddock was on to something with eliminating the income tax, Treasurer Rachel Eubanks said she has not seen research related to the elimination increasing population.

“Just because the state might have a low income tax, they may have a high sales tax, or property tax, or vice versa,” Eubanks said. “I did note that Dr. Butler, at the end of her presentation, said that she would do some research into that, and so you know we'll see if anything is generated.”

Asked directly her thoughts on the question, Budget Director Jen Flood said, “I enjoyed hearing the demographer's response.”