A celebration over a decade in the making

A version of this column originally appeared in The Alpena News.

During the spring of 2011, I was a tax policy analyst working in the Michigan Legislature. I stood on the House floor, watching the voting board as members voted on a significant piece of tax legislation that cut taxes on businesses and increased taxes on individuals. The bill passed on slim party lines. One of the casualties of this bill was the Michigan Earned Income Tax Credit (EITC), which was slashed from the 20% credit to merely 6%, making it one of the lowest benefits of states with credits. As a tax nerd who believes in adequate and equitable tax systems, it was one of the hardest votes I’ve witnessed. Raising taxes on working families with low wages so that businesses could see a tax cut just seemed wrong.

I wish I could go back in time to tell that version of me that she would see this wrong righted—and then some—almost 12 years later. 

I often joke that the EITC—now also called the Working Families Tax Credit—has been a passion of mine and a significant part of my work for my entire career. But it’s honestly the truth. I started with the legislature in 2009, a year after the Michigan EITC became effective and the year it was bumped from its initial 10% match rate to 20% of the federal credit. After the 2011 cut, I’d spend the next decade working to restore, and even expand, the credit.

And it’s not surprising that I would dedicate so much time to something with such a wonky name that folks don’t understand what it is. The Working Families Tax Credit, or EITC, is a tax credit for working families with low to moderate wages. Signed into law at the federal level by Michigan’s own President Gerald R. Ford, it has been expanded several times, and supported by Democrats and Republicans alike. Michigan’s own credit was enacted by Gov. Jennifer Granholm after nearly unanimous support in both of Michigan’s legislative chambers, which were under Republican control at the time.

Decades of research has shown the benefits of the EITC. It offsets the high taxes that families with low incomes pay in other ways, such as property and sales taxes, and helps them make ends meet. It allows families to pay for daily necessities, like groceries, housing, child care or transportation, and has positive, long-lasting benefits on children in families who receive it. It helps support racial equity in our tax structure, as people of color are disproportionately represented in low-paying jobs due to past and present discrimination in workplace and educational policies. And it is one of the most effective tools to pull people out of poverty. 

These benefits were felt by more than 730,000 Michigan families, more than 15% of Michigan’s households, in 2019, including about one million—nearly half—of Michigan’s children. Families in every county—urban and rural alike, with more than 23% of households in Lake and Wayne counties receiving the credit—and in every legislative district received this after-tax bump in incomes. While average credits are typically higher in urban areas, rural communities see higher take up, meaning a higher percentage of rural households qualify for the credit. 

Legislation was recently enacted that included, in part, a significant expansion of our state EITC. The average state credit in 2019 was $150. Had this been 30% as under the legislation, working families would have received an average credit close to $750—which could have paid for 10 months of internet, a month of child care or healthcare coverage or even to pay down debt.   And based on analysis by the Center on Budget and Policy Priorities, boosting our state credit will pull an additional 32,000 people—16,800 of them children—above the supplemental poverty measure. This will also put more money back into our local communities, as families that receive the credit tend to spend it at stores and businesses where they live and work.

I’ve spent over a quarter of my life on a policy that helps Michigan families make ends meet, and while this seems like a long time, we at the League are persistent in working on what we know is right. We worked for decades to improve affordability and quality of child care for our littlest learners. We continue to fight for policies that help educational and health outcomes for kids. We push back regularly on changes that will harm workers and families working low wage jobs. The League has been working on the issues that affect the people of Michigan for over 110 years, and we plan to be around for another 110.

So I may take a moment to celebrate, but I know that I’m already digging into what’s next.