Michigan Voters Overwhelmingly Reject Tax Increase

Michigan voters have resoundingly defeated Proposal 1, a tax package designed to raise an additional $2 billion a year, largely through sales and gas tax increases. Our pre-election analysis of the ballot initiative can be found here.

As of this writing, preliminary results show opposition to the proposal garnering 80 percent of the vote. Originally proposed as an alternative to a defeated proposal to raise the gas tax to fund transportation maintenance and improvements, the voters’ verdict on this tax increase sends legislators back to the drawing board.

Michigan has undertaken substantial reform of its tax code in recent years, changes which are reflected in a much more competitive ranking in our State Business Tax Climate Index, on which Michigan now ranks 13th. Addressing the state’s legitimate infrastructure needs while preserving the state’s growing economic competitiveness will not be easy—but few things worth doing are.