In Earned Income Tax Credit, In The News

The federal EITC was first enacted under Michigan’s own President Gerald Ford in 1975, and the past six U.S. presidents who followed have signed a federal EITC expansion into law.

Michigan’s EITC is available to any state taxpayers who file for the federal EITC, and the credits serve the same purpose. And while they generally share the same bipartisan support, our state EITC hasn’t enjoyed the same steady, upward trajectory as its federal counterpart.

In fact, in 2011 it was almost eliminated entirely under Gov. Rick Snyder’s massive tax shift, which asked residents to pay more so businesses could pay less—a shift our workers are still feeling the pain of today. The Michigan League for Public Policy and a broad coalition of advocates—including the Midwest Independent Retailers Association, the Community Economic Development Association of Michigan, AARP-Michigan, and then-Detroit Mayor Dave Bing—successfully fought to save it.

Keeping it alive in our laws was huge, but Michigan’s EITC still took a massive hit. The credit was cut from 20 percent of the federal credit to just 6 percent of the federal credit. Since 2011, Michigan’s EITC and the working families who rely on it have been quietly surviving and waiting for a better political climate to come.

That’s why Gov. Whitmer’s proposal to bump it back up is so significant. And a majority of Michigan residents see that as clearly as she does, with 67 percent of Michiganders favoring a state EITC increase, according to an EPIC-MRA poll conducted in March. Boosting the credit is a good step in undoing the damage of the 2011 cut and restoring the state EITC’s impact on Michigan workers, businesses and economy.

The credit has a significant impact on the households that receive it. It promotes work and is the best remedy for poverty in our toolbox. The EITC not only improves economic security, but other outcomes, as well. Among kids in families that receive the EITC, there are improvements in nutrition and educational and economic attainment, and a decreased incidence of low birthweight. A recent study by the University of California even found that increasing the EITC could help reduce suicide and drug and alcohol deaths in people who are financially struggling. June 2, 2019 – Crain’s Detroit Business