This bill would lower Michigan’s individual income tax rate from 4.25% to 4.05% starting in 2025 and establish 4.05% as the permanent base rate moving forward. The rate could be reduced further in future years if state revenues grow faster than inflation, but it could not increase above 4.05% under this bill. The changes apply to individuals, partnerships, estates, and trusts, updating the Michigan Income Tax Act accordingly. In addition, the bill adjusts how much income tax revenue is allocated to the State School Aid Fund, providing for small annual increases in the portion deposited through 2026 and beyond.