No, you're not imagining things. A new study does confirm your suspicions about Michigan taxes.

They're high. But not as bad as our neighboring states.

See Also: A Proposed Law in Michigan Could Reduce the Power of Homeowners Associations in a Few Helpful Ways.

What is an Effective Tax Rate?

US News Money defines it like this:

The percentage of your taxable income you pay in taxes – essentially an average of the various rates at which your income is taxed.

We're aware math isn't sexy unless you're an accountant. But you should know that marginal tax rates (your tax bracket) differ from effective tax rates (all taxes you pay).

Where does Michigan rank when it comes to Effective Total State & Local Taxes?

According to a new study, by Wallet Hub, Michigan isn't the greatest, but it's definitely not the worst, either.

  • Alaska ranks number one for lowest state taxes at 6.05%.
  • Our neighbor, Illinois, is the worst at 15.05%. It ranks #51
    • (D.C. is included on this list, too. Hence "51" places/ranks)
  • Our other neighbor Ohio is #45 at 13.20%
  • Wisconsin at #42 at 12.95%

Michigan comes in at number 39 at 12.15%. Not exactly a win.

Source: WalletHub

What is Michigan's Income Tax?

We have a flat income tax of 4.25% in Michigan, but it varies (of course it does) depending on inflation, what's in the state coffers, etc.

For 2023, it's 4.05%. 24 cities also collect an income tax on residents and non-residents (if you work in that city) in Michigan.

Only six states don't have an income tax.

That doesn't mean you won't pay a bunch more taxes in other ways, in these states.

  • Wyoming
  • Florida
  • Washington
  • Alaska
  • South Dakota
  • Texas
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The next time you look at your pay stub, just remember it could be worse. You could live in Illinois where they tax everything at an insane rate.

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