MI HB4125

Modifies the individual income tax rate structure by adding an automatic reduction mechanism beginning January 1, 2023, if general fund revenue growth exceeds inflation and the inflation rate is positive.

The rate reduction is calculated as a fraction where the numerator equals the difference between actual general fund revenue and capped revenue, and the denominator equals total income tax collections from the prior fiscal year.

Defines "capped general fund/general purpose revenue" as the 2020-2021 fiscal year revenue multiplied by an inflation adjustment factor using the Consumer Price Index.

Requires the State Treasurer and directors of the Senate and House Fiscal Agencies to determine rate adjustments by the January revenue estimating conference each year.

Establishes deposits of $600,000,000.00 annually from income tax collections into the Michigan Transportation Fund beginning October 1, 2020.