Michigan House Votes to Raise Taxes on Low-Wage Workers, Senate Poised to Follow
June 15, 2015Print
By Lauren Pescatore
The 2015 legislative session has brought trouble for the Michigan Earned Income Tax Credit (EITC). In early May, an EITC expansion fell victim to a ballot proposal that would have increased the state’s sales tax in order to fund transportation improvements. Michigan voters, not wanting to see their taxes increase, soundly rejected the measure.
Now, the credit is on the chopping block and many Michiganders are once again faced with a tax increase. Last Wednesday, the Michigan House approved a plan to fund transportation improvements by eliminating the state’s EITC completely. The Senate Majority Leader has made clear that he and most of his caucus also support eliminating the credit.
Ending Michigan’s EITC would effectively raise taxes on 820,000 low-income families raising 1 million children, according to the Michigan League for Public Policy (MLPP). The group notes that the $117 million brought in by eliminating the EITC would hardly make a dent in the $1 billion transportation plan, but could have damaging effects on the low-wage workers who rely on the credit to help make ends meet. Rather than eliminating Michigan’s EITC, lawmakers should instead reverse harmful cuts to the credit made in 2011 and prevent a tax increase for those who earn the least, the group says.
The Michigan Senate is considering the House-approved plan to eliminate the credit this week. For interactive maps, graphics, fact sheets and other ways to raise awareness about the importance of Michigan EITC for low-wage workers and their families, check out MLPP’s resources here.