On February 18, 2026, Michigan Governor announced significant changes to the state's tax laws with the aim of increasing revenue for education funding. The new tax laws are set to impact both individuals and businesses across the state.One of the key changes includes an increase in the state income tax rate for high-earners. Individuals earning over $250,000 annually will see a slight raise in their income tax rate, with the highest earners facing the largest increase. This adjustment is expected to generate an additional $100 million in revenue annually, which will be allocated specifically for public education.In addition to the income tax changes, the state has also implemented a new tax on certain luxury items, such as high-end vehicles, jewelry, and yachts. This luxury tax is projected to bring in an estimated $50 million per year, further contributing to the education fund.Businesses in Michigan will also be impacted by the new tax laws. The state has introduced a corporate tax increase for large corporations, with the revenue generated being earmarked for school infrastructure improvements. Small businesses, however, will see a decrease in their tax rates in an effort to support their growth and encourage entrepreneurship.Governor emphasized that these tax changes were necessary to address the longstanding underfunding of public education in Michigan. With the new revenue generated from the tax adjustments, the state aims to improve school facilities, increase teacher salaries, and enhance educational programs.While some critics have raised concerns about the potential impact of these tax increases on the state's competitiveness, supporters argue that investing in education is crucial for Michigan's long-term economic success. The new tax laws are set to go into effect on January 1, 2027, giving taxpayers and businesses time to adjust to the changes.