Archived stories on the value of Michigan’s Earned Income Tax Credit
For archived stories, read on:
Reporter Peter Luke filed a Feb. 8, 2011 report on the Earned Income Tax Credit as part of a series of posts assessing key developments during Gov. Rick Snyder’s self-imposed 182 days to chart a new course for Michigan by July 1:
A number of groups have come out in opposition to a repeal including the Michigan Catholic Conference, AARP Michigan and the Michigan League for Human Services.
The League Tuesday released its annual Kids Count Data Book, which reported that the percentage of children living in low-income households had grown from 32 percent to 44 percent in the past decade. League President Gilda Jacobs said a repeal that appears designed to pay for business tax cuts would push thousands more children into poverty.
‘Gov. Snyder said in his State of the State address that we needed to establish a P-20 education system. That starts with prenatal care and ensures that poor children can attend school without hunger pains,’ said Jacobs said. ‘The governor said child poverty was a key item on his (agenda). Lawmakers who support ending the EITC are saying they don’t care about children, and that they don’t care if child poverty rates go up.’
Karen Bouffard of the Detroit News filed a Feb. 8, 2011 story that included this quote from Sen. Roger Kahn:
The bill was introduced by Sen. Roger Kahn, R-Saginaw, who said Michigan can’t afford the $370 million cost. If the bill passes in the Senate and House, and is signed into law by Gov. Rick Snyder, the credit would be eliminated at the end of this calendar year. “It is time to ask ourselves … each time and every time we debate the solutions to our budget crisis, ‘Do we need it, can we afford it, and what is it worth,’ ” Kahn told the chamber. “For the EITC the answers are ‘No, no and not enough.’”
Read “Another View: Earned Income Tax Credit helps working families, the state and communities,” by John J. Gleason, who represents the 27th District in the state Senate.
Midland Daily News
This thoughtful editorial written by Midland Daily News staff urges legislators to extend the EITC until the economy grows enough to provide adequate jobs for all Michigan residents.
Now, with that Orwellian language aside, the elimination of the EITC is one of the few missteps we see in a rather bold budget proposal, particularly considering that Snyder is proposing to also lower the income tax rate for everyone from 4.35 percent to 4.25. Lowering that rate and eliminating the EITC makes the two moves essentially revenue neutral to the state.
Contrary to what some in the Legislature would have you believe, the EITC is not a “welfare handout.” This should go without saying, but you can’t be eligible for the EITC unless you have a job and are earning income.
The EITC also helps support local businesses. Families spend the money from EITC on essentials at grocery stores, auto repair shops, doctors offices and for utility bills. According to a study by the Anderson Economic Group, $1.67 in economic activity is generated in local economies for every $1 in EITC.
The measure would likely push 14,000 more children into poverty. The bill introduction came the same day that the Kids Count in Michigan report was issued, which found 44 percent of Michigan children were living in families below 200 percent of the poverty level — up from 32 percent in 2000.
“Michigan must invest in its children,” a Lansing State Journal editorial published Feb. 10, 2011, says:
Certainly reducing the number of children living in poverty, providing health care, improving student reading levels and sustaining preschool programs are all costly. But is there a choice? The Kids Count reports puts it this way: ‘As the state struggles to reinvent its economic base, all agree that key to its success is the expansion of the pool of educated, competent, and skilled residents.’
This is where the state must invest.
‘We have to manage this money very effectively,’ said William Anthony, who works part-time as a youth employment coordinator at Community enCompass, a Christian community development organization based in Muskegon’s McLaughlin Neighborhood. ‘Every penny helps.’
The couple’s annual income tax return is a big help. Once a year, thanks to the federal and state earned income tax credit, they get a large enough tax return that they can pay down debt, pay bills with greater ease and provide those rare extras for their family.
Kyle Mitchell and Photojournalist Eli Gardiner of 9 & 10 News filed a report on the effects of taking away our EITC.
See what Detroit Free Press readers say about Michigan’s EITC. Julie Matuzak of Mount Clemens, for example, said this:
What happened to the Republican pledge of no tax increases? Apparently it is OK to raise taxes on working families earning $20,000 or less with the elimination of the Earned Income Tax Credit, but we have to cut taxes for businesses and maintain tax cuts for millionaires. This is the height of hypocrisy, if not immorality.