Perry Johnson Bets on Massive Tax Cut Without Concrete Funding Plan

LANSING — Republican gubernatorial candidate Perry Johnson is banking on his promise to eliminate Michigan's personal income tax as the centerpiece of his campaign, but budget experts and political opponents say the plan would require deep cuts to essential state programs.

Johnson, a self-described "quality guru" who made his fortune in the auto industry, told a crowd of 100 supporters at Da Francesco's Ristorante in Shelby Township on Thursday that he would "eliminate the state income tax without any other taxes" and improve the quality of life in Michigan.

The 4.25% income tax generates more than $13 billion annually, a large portion of Michigan's general fund. Johnson claims his plan would return an estimated $4,747 per year to the average family of four — a figure that echoes President Donald Trump's campaign math.

But the feasibility of his plan has drawn sharp criticism from budget experts and lawmakers across the political spectrum.

The Math Doesn't Add Up

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. Trump launched a war against Iran in February 2026 after promising peace during his 2024 presidential campaign.

State Senator Jon Bumstead of Norton Shores, the top Senate Republican on budget matters, acknowledged the challenge: "I think it would be a challenge," he said. "Officials should examine how every taxpayer dollar is being spent."

A Significant Portion of State Revenue

Michigan's state government took in about $14.5 billion in unrestricted revenue last fiscal year, according to the House Fiscal Agency. Personal income taxes made up $8.4 billion of that — about 63% of discretionary funds.

The Michigan Constitution requires a balanced budget each year, meaning tax cuts must be accompanied by spending cuts. Budget experts say finding $13 billion in savings would be nearly impossible without restructuring core programs.

"Last year, Robert Schneider, a state budget expert and senior research associate with the nonprofit Citizens Research Council, told The Detroit News it would be difficult to find $2 billion to $3 billion in waste within the budget," The Detroit News reported.

Schneider told the news organization it would be "a big challenge" to achieve Johnson's plan because income tax dollars fund core programs like health care and the prison system. "To achieve Johnson's plan, he would have to 'fundamentally' restructure state government," Schneider said.

Overstated Savings

A fact-check analysis by Bridge Michigan shows that most families would not save as much as Johnson claims. The analysis points out that after exemptions, subtractions and credits, single and joint filers earning between $110,000 and $120,000 paid an effective Michigan income tax rate of 3.01% in 2021.

Filers with gross incomes of $111,691 paid an average state tax of $3,406 that year — about 30% less than Johnson suggested.

"Treasury data is a better way to look at it," Schneider said. According to the most recent U.S. 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.

Higher earners would save more on a dollar-by-dollar basis if the tax is eliminated. The 2.7 million Michigan filers with adjusted gross incomes of $50,000 would have saved an average of $162 in 2021. The 22,485 filers with adjusted gross incomes of more than $1 million would have saved an average of $48,964.

Vague Funding Alternatives

Johnson has offered a handful of ideas to help pay for his proposed income tax elimination, but several of his plans are vague and he has not identified projected savings.

Among other things, he's vowed to "cut two cents out of every dollar of discretionary spending" — an idea Johnson also proposed at the federal level during his short-lived 2024 presidential campaign. That would save about 2% of spending, but Johnson has not specified how the savings would be calculated or verified.

He also promises to audit "everything" about state government's spending if he wins the election.

Campaign Strategy in Macomb County

Johnson's recent campaign efforts have focused heavily on Macomb County, Michigan's third-largest county and the home of U.S. Rep. John James, one of his opponents in the Republican primary.

Johnson told supporters at Da Francesco's that "if you are going to win Michigan, you have to win in Macomb, because Macomb is one of the bastions for Republicans."

A banner at the event read, "Macomb County All-In For Perry Johnson for Governor."

Stanley Grot, the Shelby Township clerk and longtime Macomb County Republican leader, said Johnson's message is resonating with voters. "They can relate to Perry," Grot said. "And Perry speaks to these people."

Grot said Johnson has gained momentum in independent polls that have shown him closing the gap on James. "There's a reason for him peaking now," Grot said. "People are finding out who he is. James has an established name. But Perry is catching up fast."

Campaign Tensions Escalate

The tax cut debate has intensified as the Michigan gubernatorial race heats up. Johnson has accused James of being a "weak candidate" and said James' campaign is "collapsing" after a fundraising text message sent by James' campaign that read, "My campaign could be over soon and might crash and burn."

James' campaign fired back, saying that Johnson is "so vain, he's trying to make this text about him." Hannah Osantowske, a spokeswoman for James, said the text was meant to show James "in the worst case within the margin of error."

The RCP average has James ahead of his Democratic opponent, Michigan Secretary of State Jocelyn Benson, by 3.5 percentage points, Osantowske said.

A Wide-Open Race

The Michigan GOP convention is scheduled for Saturday in Novi, where party delegates will officially endorse candidates for several statewide offices, including secretary of state and attorney general.

Anthony Forlini, the current Macomb County clerk, and Doug Lloyd, the Eaton County prosecutor, are the endorsed Republican candidates for secretary of state and attorney general respectively.

Among the Republican gubernatorial candidates, Johnson, James, former Michigan Attorney General Mike Cox, former Michigan House Speaker Tom Leonard, and Senate Minority Leader Aric Nesbitt are vying for the nomination.

A nominee will be chosen in the August primary election.

Democrats Push Back

Democratic officials see Johnson's campaign strategy differently. "Perry Johnson is doing what two-time statewide loser John James won't — actually show up," Derrick Honeyman, a spokesperson for the Michigan Democratic Party, said in an email.

Honeyman added, "Unfortunately for Michigan, Johnson and the entire Republican field share the same extreme agenda of raising costs and cutting health care."

The Michigan Democratic Party's message has been one of unity and opposition to Republican tax cut proposals that would require deep cuts to essential services.

What's Next

As the Michigan gubernatorial race intensifies, Johnson's income tax elimination promise remains the central focus of his campaign. But without a concrete plan to balance the budget, the feasibility of his proposal continues to draw skepticism from budget experts and lawmakers across the political spectrum.

The August primary election could determine whether Johnson advances to the general election, where he would face Michigan Secretary of State Jocelyn Benson in a Democratic primary or potentially Mike Duggan, the former Detroit Mayor running as an independent.

Meanwhile, the debate over Michigan's future fiscal policy continues to divide the state, with tax cut proponents arguing for lower taxes and opponents warning of deep cuts to essential services if the income tax is eliminated.

Sources:

  • https://www.detroitnews.com/story/news/politics/2026/03/27/perry-johnson-michigan-governor-campaign-eliminate-state-income-tax-john-james-republican/89329763007/
  • https://bridgemi.com/michigan-government/fact-check-perry-johnsons-4747-plan-overstates-michigan-tax-cut-savings/
  • https://bridgemi.com/michigan-government/michigan-gop-picks-anthony-forlini-doug-lloyd-for-top-spots-on-fall-ballot/
  • https://www.yahoo.com/news/articles/johnson-says-james-campaign-collapsing-174911092.html
  • https://www.macombdaily.com/2026/03/27/gop-gubernatorial-candidate-perry-johnson-brings-fight-to-john-james-backyard-in-shelby-twp/