What the Tax Reform Bill Means for Michigan
Nearly everyone will see a cut
Congress passed a major federal tax reform bill today. There are lots of details but the bottom line is that practically every household in Michigan has a tax cut in their near future.
A typical Michigan household has two adults and one dependent earning $50,803 annually. According to a tax calculator, this family would save more than $1,000 a year in taxes under the bill. The Tax Foundation estimates that the bill will lead to more than 10,000 extra jobs in Michigan and a $628 wage increase because of changes to business taxes.
According to the federal Joint Committee on Taxation and the liberal Urban Institute-Brookings Institution Tax Policy Center, every single income group will receive a net tax cut. Those who now pay more and people who have more children will benefit the most.
The tax code will also become slightly more progressive as the share of taxes paid by higher-income individuals will rise. Economist Brian Riedl of the Manhattan Institute notes, "The bottom 80 percent of families currently pay 33 percent of all combined federal taxes, yet will get 35 percent of the tax cuts. By contrast, the top one percent currently pays 27 percent of all federal taxes, but will get just 21 percent of the tax cuts."