FAQs

No, The “fair share surcharge” is levied only on individuals whose annual taxable income exceeds $500,000 for single filers or $1,000,000 for joint filers. The fair share surcharge is not a tax on businesses. There are some business owners, corporate executives, and others whose individual taxable income is high enough to trigger the fair share surcharge - about 2% of all tax filers in Michigan. The 5% surcharge is only levied on their income above and beyond $500,000/$1,000,000.

Yes, the amendment states “100% of the money…must be expended to support classrooms in local school districts, including funding for career and technical education, attracting and retaining high-quality educators, and reducing class sizes. The money may not be expended for other purposes and…is subject to an annual audit.” 

The lottery is an important contributor to public schools in Michigan, but probably makes up less of the total than you think. In FY2023, the lottery made up 6.2% of the School Aid Fund.

For every $1 spent on Lottery during FY23, 61 cents went to prizes, 27 cents went to the School Aid Fund, 9 cents went to retailer and vendor commissions, and 3 cents funded Lottery operations.

Yes!  Recent research has consistently found that expenditure increases improve student achievement, high school graduation rates, adult income and earnings, and reduced poverty for disadvantaged students.

Because each state relies on a different mix of types of taxes (sales, property, income, etc.), it doesn’t make sense to compare the surcharge to one specific tax in another state. However, Michigan currently ranks 14th lowest in the country for average overall effective tax rate, and is lower than all neighboring Great Lakes states.

Massachusetts passed a similar fair share tax in 2022. You can learn about its incredible impact here.

New research shows that the number of wealthy individuals has actually GROWN in states after increasing taxes on high earners.

While is certainly possible that some high income individuals will pursue lower taxes in other states,  they can do that now. Unfortunately, when it comes to hiding their income, American millionaires and billionaires are already evading about $150 billion a year in taxes, according to the IRS. The best way to handle this is not to lower their tax rates, but to fund the IRS to audit wealthy individuals.

Like many states, Michigan starts its definition of "taxable income" with the federal adjusted gross income. You can read more details here.