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Michigan's Tax Code Overhaul: $1B Savings or $2B Risk?

10/14/2025

22 3 Full Breakdown

Summary

Story summary

Governor Gretchen Whitmer signed a plan decoupling Michigan's tax code from the federal code, with $688 million expected this year and $1.04 billion by 2029.
Democrats say the change removes taxes on tips, overtime, and Social Security.
Business groups warn the decoupling could raise state taxes by up to $2 billion.
Trump's "One Big Beautiful Bill" continues to shape Michigan's fiscal landscape amid ongoing debates.

History

Historical Context

The Tax Cuts and Jobs Act, signed by President Trump in December 2017, reduced the corporate tax rate from 35% to 21% and capped state and local tax deductions at $10,000. Michigan Governor Gretchen Whitmer's recent plan to decouple from this federal framework could impact $688 million in state revenue, reflecting ongoing tensions between state and federal tax policies and potentially increasing Michigan's taxes by up to $2 billion.

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Story summary

Governor Gretchen Whitmer signed a plan decoupling Michigan's tax code from the federal code, with $688 million expected this year and $1.04 billion by 2029.
Democrats say the change removes taxes on tips, overtime, and Social Security.
Business groups warn the decoupling could raise state taxes by up to $2 billion.
Trump's "One Big Beautiful Bill" continues to shape Michigan's fiscal landscape amid ongoing debates.

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