Perry Johnson's Income Tax Elimination Plan Would Require Massive State Spending Cuts That Threaten West Michigan Services

Republican gubernatorial candidate Perry Johnson is filling Michigan airwaves with a promise to eliminate the state income tax and return $4,747 annually to the average family of four. But budget experts say the plan would require cutting $13 billion in state revenue without alternative funding, forcing deep reductions to education, healthcare, roads, and other essential services that West Michigan communities depend on.

Savings Claims Don't Add Up

Johnson's campaign points to a social media video in which he explains: "The median income for a family of four is $111,690. A savings of 4.25% in income tax would be $4,747 every year in your pocket."

But taxes are not that simple. After exemptions, subtractions and credits, single and joint filers who earn between $110,000 and $120,000 paid an effective Michigan income tax rate of 3.01% in 2021, the most recent year for which state data is available. Filers with gross incomes of $111,691 paid an average state tax of $3,406 that year – about 30% less than Johnson claimed.

Bob Schneider, a state budget expert with the non-partisan Citizens Research Council of Michigan, told Bridge Michigan: "Treasury data is a better way to look at it." According to the most recent US Census Bureau data, Michigan's median income for a four-person household is currently about $123,010. Filers who earned that much in 2021 paid an effective tax rate of 3.11%, or about $3,826.

Those families would save significant money if the income tax were eliminated – just not as much as Johnson has suggested.

The $13 Billion Question

Michigan's state income tax generates more than $13 billion annually, a large chunk of the money that funds state government's operations. Johnson has promised to eliminate it without raising other taxes, relying on what he calls aggressive cuts to "waste, fraud and inefficiency in state government."

State Representative Alabas Farhat of Dearborn, the top House Democrat on budget matters, said Johnson's plan would only work if he was willing to cut off the Medicaid health insurance for 2 million low-income residents and lay off thousands of teachers. "I believe his proposal just as much as I believe President Donald Trump's promise for no new wars," Farhat said.

Michigan Senator Jon Bumstead of Norton Shores, the top Senate Republican on the budget, acknowledged that cutting $13 billion would affect programs. "I think it would be a challenge," Bumstead said, adding that officials should examine how every taxpayer dollar is being spent.

Core Programs Would Be Hit

In fiscal year 2025, $8.4 billion of the $13.3 billion state general fund came from the income tax, about 63%, according to the nonpartisan House Fiscal Agency. The income tax dollars fund core programs like health care and the prison system.

Another big chunk of income tax revenue – close to $4 billion –flows into the School Aid Fund for education. This means West Michigan school districts would face immediate funding shortfalls if the income tax is eliminated.

Robert Schneider, senior research associate for state affairs with the Citizens Research Council, told The Detroit News it would be difficult to find $2 billion to $3 billion in waste within the budget. "To achieve Johnson's plan, he would have to fundamentally restructure state government," Schneider said.

State Budget Has Grown, But Not All of It

Johnson focuses his campaign on the fact that the state budget has grown by about $30 billion over the last decade, from $54 billion in fiscal year 2016 to about $84 billion in fiscal year 2026.

But about a third of that growth is because of increases in the amount of federal dollars flowing to the state. State legislators don't have discretion over how that money is used. In addition, like Michigan residents, state government has faced the impacts of inflation, with rising construction costs and price tags. A $54.4 billion budget in July 2015 would have the same buying power as a $73.6 billion budget in July 2025, according to the U.S. Bureau of Labor Statistics.

Macomb County Focus, West Michigan Impact

Johnson promoted his support in Macomb County during a recent campaign event at Da Francesco's Ristorante in Shelby Township. Stan Grot, the Shelby Township clerk and longtime Macomb County Republican leader, introduced Johnson and said his plan is "resonating." "They can relate to Perry," Grot said. "And Perry speaks to these people. Macomb County is Perry country."

But the impact of Johnson's plan would be felt statewide, including West Michigan communities that rely on state funding for schools, roads, healthcare facilities, and social services. The loss of $13 billion in revenue would force difficult choices about what programs continue and what gets cut.

What Voters Need to Know

Johnson has spent more than $20 million on prior failed campaigns for governor and president. This 2026 campaign is implementing a first-in-the-nation verification system to ensure the highest quality signatures, after his 2022 campaign was disqualified from the ballot due to petition fraud issues involving rival campaigns.

Fellow GOP candidates Mike Cox, Aric Nesbitt and Ralph Rebandt have also called for axing the income tax, while others have called for cuts. Some candidates are also proposing property tax cuts or elimination.

But the math is clear. Eliminating the state income tax without alternative funding would require fundamental changes to how Michigan state government operates. And those changes would impact every West Michigan family, from schools to hospitals to roads.

Johnson's argument about why getting rid of the income tax is feasible is based on the fact that the state budget has grown. But state budget experts say the real story is that voters shouldn't expect details about potential cuts because campaigns have little incentive to provide them. "Until people demand that type of detail in order to feel confident in their pledges about tax cuts, you're unlikely to get it from the campaigns," Schneider said.

Michigan voters deserve to understand what eliminating the income tax would mean before casting their ballot in November.