In Earned Income Tax Credit, News Releases, Tax and Budget

FOR IMMEDIATE RELEASE
Jan. 24, 2023

Contact:
Laura Ross
lauramr@mlpp.org
517-281-1084

League applauds Senate Housing and Human Services Committee for passage of EITC bill

Senate Bill 3 would expand tax credit for Michigan’s working families, benefit nearly 1 million children

LANSING—The Michigan League for Public Policy issued the following statement on the Michigan Senate Housing and Human Services Committee hearing today on Senate Bill 3, sponsored by Sen. Kristen McDonald Rivet, to increase the state Earned Income Tax Credit (EITC) to 30% of the federal credit. The statement can be attributed to League President and CEO Monique Stanton.

“The committee’s actions today reflect the reality that Michiganders around the state are working harder and earning less. We’re heartened that Michigan’s leaders are willing to fight for their constituents by boosting the Earned Income Tax Credit to 30% of the federal credit. When it’s passed, Senate Bill 3 will help nearly 740,000 workers with low incomes keep more of what they earn, and it will support the local economies where those workers live. The impacts are far reaching—every county in the state will see a boost, whether rural or urban—and nearly half of Michigan’s children benefit from the credit. And making the increase retroactive will give residents the immediate relief they need as prices on necessities continue to rise.”

“An increase to 30% of the federal credit would mean an average credit of $750 for eligible families, which could pay for one month of healthcare for a family of four, nine months of diapers or ten months of internet access. And Michiganders spend their credits at local businesses, keeping money flowing through our towns and cities and strengthening the economy. We’re glad to see that the Legislature is finally rectifying the devastating cut that was made to the credit in 2011, which made Michigan’s EITC one of the lowest in the country. That’s why the League and a coalition of over 230 health, social service, faith, and business groups around Michigan are determined to strengthen the state’s working families tax credit. We’re hoping the House will follow the Senate’s lead and make a boost to 30% of the federal credit their goal, as well.” 

The League has long been an advocate of the EITC, from supporting its introduction in 2006 to opposing its reduction in 2011. The League’s President and CEO Monique Stanton provided testimony on Senate Bill 3 before the committee today, including the following excerpt:

“Michigan’s existing credit allows nearly 740,000 workers with low incomes to keep more of what they earn, but at a rate of only 6% of the federal credit, Michigan’s credit today is among the lowest in the country. With an average credit of just $150 for eligible filers, Michigan’s existing credit is not doing enough to help families make ends meet at a time when rapid inflation is driving up the costs of essentials like child care and groceries.

Increasing the credit to 30% will return $443 million to those workers and families with the greatest need—Black, brown and white; rural and urban—and support the local economies where these workers live. An increase to 30% of the federal credit would raise the credit from $150 to $750 on average, benefitting both workers with moderate incomes and those living in poverty. A Michigan credit worth 30% of the federal amount is estimated to lift over 32,000 people, over half of them children, above the poverty threshold.”

Full testimony is available here.


Useful Links:

Statewide fact sheet showing the impact of the EITC at 6%, 20% and 30% of the federal credit

County-specific fact sheets showing the local impact of the EITC at 6%, 20% and 30% of the federal credit

League 2024 Earned Income Tax Budget Priority Data Sheet

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The Michigan League for Public Policy, www.mlpp.org, is a nonprofit policy institute focused on opportunity for all. Its mission is to use data to educate, advocate and fight for policy solutions that undo historic and systemic racial and economic inequities to lift up Michiganders who have been left out of prosperity. It is the only state-level organization that addresses poverty in a comprehensive way.