Perry Johnson's Tax Plan Overstates Savings as Michigan Governor Race Tightens

Fact Check Shows Perry Johnson's Income Tax Elimination Plan Would Save Families Less Than Campaign Claims

LANSING — Republican gubernatorial hopeful Perry Johnson has been aggressively promoting his plan to eliminate Michigan's state income tax, claiming families would save $4,747 annually. But an independent analysis reveals the savings would be significantly less for most taxpayers, raising questions about the feasibility of the proposal and how the state would balance its budget without one of its primary revenue sources.

The Math Behind Johnson's Claim

Johnson's campaign pointed to a social media video in which he explained: "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."

On its face, that math essentially checks out. Michigan currently has a 4.25% income tax, and the median family of four actually earns about that amount. But taxes aren't so simple.

According to state data, 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.

"Treasury data is a better way to look it," said Bob Schneider, a state budget expert with the non-partisan Citizens Research Council of Michigan.

What Michigan Families Would Actually Save

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.

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

Also worth noting: Because Michigan has a flat tax — 4.25% regardless of income — 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, per state data.

Johnson's Broader Plan and Other Candidates

Johnson is one of several candidates proposing to slash taxes without concrete plans to balance the state budget. 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.

In a letter to the Detroit Free Press, Johnson defended his plan, saying: "Yes, my plan to eliminate the state income tax is bold. It is about letting people keep more of what they earn — real money that can go toward groceries, gas, housing, and savings."

He also emphasized his background as a "quality guru" who has helped companies improve efficiency and eliminate waste, suggesting that kind of experience is what Michigan government desperately needs. Johnson promised a "MEGA audit" to uncover fraud and waste, and called for zero-based budgeting and cutting discretionary spending by 2%.

Mike Cox, another Republican candidate and former Michigan Attorney General, also supports eliminating the income tax but offered a different revenue replacement strategy. "The income tax is $13 billion every year," Cox told WDET. "Michigan's government, under the governor's current proposal, will have grown $31 billion over seven years. That's over twice what it would take to eliminate the income tax."

Cox argued that the state could replace lost revenue through efficiency improvements and allowing small businesses to keep more of their money. "It would cut the state corporate tax on 900,000 small businesses here in Michigan," he said. "What then happens? The owner there can buy another stove or hire another server or consider opening another facility."

A Tightening Governor Race

Johnson's aggressive campaign messaging and $10 million ad blitz have reshaped the Republican primary for governor. According to recent polling, Johnson is running neck and neck with U.S. Rep. John James, who had been the runaway frontrunner before Johnson's entry.

An independent survey conducted by JMC Analytics & Polling showed Johnson narrowly trailing James: James with 23% support, Johnson with 20%, Mike Cox with 6%, and Aric Nesbitt with 5%. The sample of 450 likely primary voters had 44% undecided.

Another survey by 1892 Polling found James up by 26 percent to 21 percent, with Cox, Nesbitt, and Leonard in mid-to-low single digits and 42% undecided.

According to John Couvillon, CEO of JMC Analytics: "In the Governor's race, John James has a 23-20% lead over Perry Johnson that is comfortably within the statistical margin of error. No other candidate polls more than 6%, and 44% are undecided."

Couvillon noted that among Trump/MAGA Republicans, Johnson has a 24-20% lead over James, while among traditional/establishment Republicans, James leads 30-15% over Johnson.

Major Questions Remain

Despite Johnson's aggressive communication and bold tax promises, major questions remain about how he — and other candidates with similar proposals — would operate state government after cutting one of its primary funding sources.

"Can cutting 2 cents from every state dollar actually replace state income tax?" asked a voter from Brimley as part of Bridge Listens, Michigan Public's non-scientific survey of election year issues.

Another voter from Sault Ste. Marie asked: "Johnson says he will eliminate income tax, my question is, what revenues will be used to fund the state's operations?"

As the Michigan governor race heats up, voters will have to weigh bold tax promises against the practical realities of running a state government with limited resources.