Among the supporters of moving the state EITC from 6 percent of the federal level to 30 percent of the federal amount are the Small Business Association of Michigan, Michigan Manufacturers Association, chambers of commerce from Midland, Saginaw, Grand Rapids, Detroit and more, Michigan Restaurant and Lodging Association, Health Care Association of Michigan, Michigan Catholic Conference, The Christian Reformed Church of North America, Eastminister Presbyterian Church, United Church Outreach Ministry, Michigan League for Public Policy, Michigan’s Children, United Ways from Midland and Washtenaw counties and South Central, Southeast, Southwest and West Michigan and many many more.
“I’ve never seen such a large and inclusive group of organizations come together to back a tax cut,” said Ken Sikkema, former GOP Senate Majority Leader and a co-chair of the Michigan Consensus Policy Project, a bipartisan group of former policymakers, who emceed a news conference today. “It’s because boosting the state EITC from the current 6 percent of the federal EITC to 30 percent would encourage employment, help local communities and deliver a targeted tax cut to lower income working families who are struggling to make ends meet today.”
Veronica Horn is president and CEO of the Saginaw County Chamber of Commerce, one of the more than 10 chambers that have co-signed a letter to lawmakers endorsing Senate Bill 417, sponsored by Sen. Wayne Schmidt, R-Traverse City, that would boost the Michigan EITC to 30 percent of the federal level.
At today’s news conference she read from that letter, saying the EITC “exemplifies a pro-work philosophy and provides financial incentive to increase participation in the workforce. It is explicitly designed to encourage greater participation in the workforce because it is only available to families that work. In a time when many employers are having difficulty filling available jobs, the EITC has a proven track record of pulling people into the workforce.”
The letter also noted that “the EITC increases local purchasing power: Research indicates that families mostly use the EITC to pay for necessities, repair homes, maintain vehicles that are needed to commute to work and, in some cases, obtain additional education. The bigger the credit, the more money spent locally.”
Tom Hickson, vice president of public policy at the Michigan Catholic Conference, said “While encouraging the human dignity that comes with work, the EITC is a pro-family, pro-children policy that provides a level of stability and assistance to help less affluent families get by and cover necessary expense and emergencies.” He also noted that the expansion will particularly help rural counties in the state where, as a share of population, more people are often in low-paying jobs than in more urban counties.
Former Michigan State Treasurer Nick Khouri, who is on the board of Michigan Future Inc., said now is the time to boost the state EITC from its current level of just 6 percent of the federal EITC. “This single tax law change in Michigan could provide simple and effective tax relief for Michigan working families, directly support Michigan’s small business community and give an important boost to the state’s long-term economic growth. And it does so without adding to the state’s bureaucracy, since it would be incorporated into existing tax laws.”
Monique Stanton, president and CEO of the Michigan League for Public Policy, added that nearly six in ten Michigan jobs pay less than $47,000, and the state’s child poverty rate is at 19%, and increasing the state EITC will help create opportunities for success for Michigan workers and parents. “Too many Michiganders are working hard every day but still struggling to make ends meet and provide for their families. Expanding the EITC will help boost earnings for families that are barely getting by, providing them an opportunity to step up and out of poverty toward meaningful economic security.”
To view or listen to the news conference, click here for video and here for audio. To view the Michigan EITC Coalition statement from more than 80 organizations, click here. You can also view the letter from the chambers to the governor and legislature by clicking here.
Background: The EITC is a refundable Federal Credit established in 1975 by Michigan’s own President Gerald Ford, with support from both Democrats and Republicans. It was later expanded by President Ronald Reagan. The Michigan EITC was started in 2006 with bipartisan support. Today, eligible taxpayers get 6 percent of their federal EITC payment through the Michigan EITC. Sen. Schmidt’s bill would raise that 30 percent over time.
Benefits only go to working taxpayers and phase out at higher incomes, ending at $57,414 for a couple with three dependents.
More than 730,000 Michigan households received the state EITC in 2019 – impacting nearly one million Michigan children – putting nearly $110 million back into Michigan’s economy. Sen. Schmidt’s proposal would boost that to $460 million.
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