Michigan's Tax Hike Ballot Measure Defeated For Now. Massachusetts Shows Potential Horror To Come.

Michigan taxpayers, small businesses, and residents scored a major victory with the defeat of activists' efforts to double the state's tax rate. The proposed ballot measure to increase the state's top rate to 9.25% -- the 7th-highest in the nation -- couldn't get the signatures necessary to qualify, gathering fewer than 250,000 of the required 446,198.

Invest in MI Kids, the San Francisco-backed activist group behind the measure, has vowed to regroup and try again for 2028.

New year, same story. This tax hike would decimate the state's already beleaguered small business community, while doing nothing to improve education. There is no correlation between increased education funding and outcomes. Expropriated funds would be devoured by the education-industrial complex, including administrators, unions, Chromebook contracts, and free lunches for middle-class and wealthy students.

We don't have to look far to see how similar dramatic tax increases are playing out in real time. Several states have experimented with them and are paying the price. Massachusetts is Exhibit A. A 2022 activist ballot measure there raised the top tax rate from 5% to 9%.

The consequences have been stark. The state now has one of the highest levels of outmigration and capital flight. A Boston Globe poll finds one in three residents has considered leaving within the last year. According to new IRS data, the state lost $4.2 billion in income in 2023, with successful job creators accounting for 70% of the outflow. Small businesses are fleeing across state lines to New Hampshire.

As a result, Massachusetts ranks among the worst in the nation for job growth, with layoffs surging. It is one of only four states with fewer private-sector jobs than before the pandemic. "Is the Massachusetts Economy About to Get Wrecked?" reads a recent headline in Boston Magazine.

To prevent this outcome in Michigan, Main Street supporters and ordinary residents need to speak out now about the importance of competitive tax policy and the zero impact more tax dollars have on education outcomes. We need to lay the groundwork to fight this destructive and polarizing class warfare before it begins again.

Any state can learn from its own policy mistakes, but smart ones like Michigan should learn from others.