Michigan League for Public Policy President Gilda Jacobs says eliminating the state Earned Income Tax Credit to help fund a road funding package amounts to “paving the roads on the backs of working poor people in the state.”
The Earned Income Tax Credit goes only to low-income working families. Jacobs calls it a “very effective anti-poverty tool.” The EITC started as a federal program. The state later created its own credit. Jacobs was in the Legislature at the time that was approved.
The state Earned Income Tax Credit was reduced as part of the tax overhaul approved when Governor Rick Snyder took office. The credit would have been fully restored if voters had approved Proposal 1 in May. Now the state House has approved a road funding proposal that takes $117-million from the credit to help off-set the cost. Jacobs says eliminating the credit will hurt Michigan’s economy. She says that money is used for things like a car repair, clothes or groceries bought at a local business.
Republicans have argued that the state Earned Income Tax Credit doesn’t provide much money. But Jacobs says even as little as $10 a month, can mean a lot for families which are struggling to make ends meet.
The Michigan League for Public Policy commissioned a poll which shows broad support for keeping the Earned Income Tax Credit in place. Jacobs says their survey shows people would prefer to increase the gas tax to pay for road repair.
