Michigan Gubernatorial Candidate John James Reiterates Calls to Eliminate State Income Tax

Michigan Republican gubernatorial nominee John James recently doubled down on his commitment to eliminate the state income tax, a pro-growth reform that would allow Michigan families to keep more of their hard-earned money and make the state more competitive for jobs and investment.

“We are eliminating the state income tax. Not someday. Not maybe. We are doing it.” reads James’s website.

Michigan currently imposes a flat 4.25 percent individual income tax, taking billions of dollars each year out of the pockets of workers, families, and small businesses. James has proposed cutting the tax by roughly 25 percent in his first year in office, funded in part by reducing waste and unnecessary spending in Lansing, before continuing toward full elimination.

“Eliminate the income tax so Michigan families keep what they earn,” James said when unveiling his tax plan earlier this year.

Eliminating the income tax would represent a major improvement to Michigan’s tax code and put the state in a much stronger position to compete both with neighboring states and nationally. In 2025, Ohio passed a budget that reformed the state’s income tax to a flat 2.75% rate, with low-income Ohioans paying no income tax. Similarly, Indiana will reduce their income tax rate to 2.9% by 2027, with further cuts based on revenue triggers. Failure to make progress risks further migration out of the state, reducing state revenues, making it harder to budget for the future, and compromising key functions.

Representative James’s affordability agenda is not just limited to repealing the state’s income tax. James has pledged to repeal the 24% wholesale tax on cannabis, which has been crippling the state’s legal markets and given illicit operators an advantage.

But lasting tax relief must be paired with fiscal discipline in Lansing. James’s plan recognizes this by calling for aggressively auditing key government agencies, ensuring transparency among employees, and limiting earmarks in the budget process (which overwhelmingly benefit politically connected individuals and organizations). By rooting out waste, fraud, and abuse while making it harder for lawmakers to funnel taxpayer dollars toward favored interests, these reforms would help ensure that savings are returned to taxpayers rather than swallowed up by more government spending.

Michigan has a clear choice. It can remain still and make itself less competitive, or it can join the growing number of states working to lower income taxes and allow taxpayers to keep more of what they earn.

John James has made clear which direction he intends to take the state. Eliminating Michigan’s income tax would provide lasting relief to families and small businesses, improve the state’s economic competitiveness, and send a powerful message that Michigan is once again serious about attracting workers, businesses, and investment.

Americans for Tax Reform applauds John James for reaffirming his commitment to eliminating the state income tax.