Michigan should keep Earned Income

By Tupac Hunter
The Earned Income Tax Credit helps Michigan’s lowest-wage workers who are trying to support their families. This is a credit for workers, which is why we call it the Earned Income Tax Credit. While I am encouraged by the call for bipartisanship from my colleagues, I am disappointed and find it unconscionable that some Republicans are targeting the working poor by proposing to eliminate the EITC.

The EITC not only helps struggling families, it also helps local businesses in our communities. The EITC is a refundable tax credit for those who work. Taxpayers receive the credit as a refund that they are able to spend at their local stores. So the EITC not only helps workers, it helps our businesses by generating more spending and demand for products. According to the Michigan League for Human Services, the EITC brought $338 million into our local communities last year. I doubt that any community wants to lose this extra money.

Workers claiming the EITC must meet federal and state income requirements. The highest-earning qualifying worker is married with three children earning less than $48,362, or a single parent with three children earning less than $43,352. These working families could earn a credit of up to $5,666 with Michigan’s portion of the EITC accounting for 20 percent of that credit. The lowest-earning qualifying worker has no qualifying children and earns less than $18,470, if married, or less than $13,460, if single. Such workers could earn a credit of up to $457 between the federal and state earned income tax credit.

Michigan’s hard-working citizens are just as deserving of tax credits as those who earn bigger salaries. Just as we give businesses tax credits to help with their expenses, the EITC gives our struggling working families a small credit to help with their expenses. It is unconscionable that these workers are targeted for cuts in order to balance our budget. Cutting the EITC will hurt the profit margin of our local businesses when families have less cash to spend. Taking money out of a family’s pocket means that we are also taking money out of our local economy.

The Earned Income Tax Credit has an interesting history. The state EITC was a Republican-sponsored bill passed with bipartisan support in 2006. The Michigan EITC is based on the federal EITC created by President Gerald Ford, and then expanded by President Ronald Reagan and President George Bush. Three Republican presidents understood the value of a small tax credit to help lift people out of poverty. It is time for my legislative colleagues to also see the value of the EITC.

Eliminating the Earned Income Tax Credit would be nothing more than punishing workers for holding a job that doesn’t earn them a big salary, and punishing local businesses by cutting this money families could spend in their community. We cannot reinvent Michigan by forcing some of our citizens deeper into poverty. All Michiganders have a role to play in our state’s recovery. The EITC gives our fellow citizens an opportunity to play their part in making Michigan great again.

(State Sen. Tupac Hunter is the Democratic floor leader and represents the 5th District, which comprises Dearborn Heights, Inkster and northwest Detroit. He is the minority vice chair of the Senate committees on banking and financial institutions, and the Senate committee on economic eevelopment, and is a member of the Senate committee on government operations.)