Advance Notice: Briefs

Dem senator pushes huge boost to the Earned Income Tax Credit

By: - February 21, 2019 5:51 pm

A Democratic lawmaker doesn’t just want to restore a tax credit Gov. Rick Snyder and Republicans chopped for low-income people during their 2011 tax overhaul.

State Sen. Jeff Irwin (D-Ann Arbor) is introducing Senate Bill 107 increasing the Earned Income Tax Credit (EITC) to a higher rate than it was pre-Snyder. This would impact more than 750,000 Michiganders.

Jeff Irwin

“The Earned Income Tax Credit is a proven tool for lifting working families out of poverty, and the money it puts into the pockets of the working poor goes right back into our local economies,” Irwin said in a statement Thursday. “People all over Michigan are filing their federal taxes and they’re seeing their taxes go up, and that their refunds are smaller or non-existent. Low-income workers are working harder for less, and Michigan can — and should — provide these people some tax relief.”

Currently, low-income residents can claim on their tax return 6 percent of the federal EITC, which the nonpartisan Michigan League for Public Policy (MLPP) calls “one of the weakest state credits nationwide.”

Irwin’s plan boosts that to 30 percent. SB 107 has been referred to the Senate Finance Committee.

The Michigan rate used to be 20 percent, but Snyder proposed the decrease to help pay for his roughly $2 billion corporate tax cut. At the time, the Republican argued that it was one of many tax breaks for children, charitable giving and college tuition that should be eliminated for individuals.

Rick Snyder and Brian Calley at their year-end press conference, Dec. 11, 2018 | Ken Coleman

Per the Internal Revenue Service (IRS), individuals qualify for the EITC based on income levels in which they must make less than:

  • $15,270 if single with no qualifying children
  • $49,194 if single with three or more qualifying children
  • $20,950 for families with no qualifying children
  • $54,884 for families with three or more qualifying children

According to the MLPP, almost 757,000 Michigan families, raising more than 1 million children, received a state EITC at an average of $145 in 2015.

The EITC used to enjoy wide bipartisan support, with Republicans like former President Ronald Reagan as key supporters. The tax credit was viewed by conservatives as an attractive alternative to raising the minimum wage.

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Susan J. Demas

Susan J. Demas is a 23-year journalism veteran and one of the state’s foremost experts on Michigan politics, appearing on C-SPAN, MSNBC, CNN, NPR and WKAR-TV’s “Off the Record.” In addition to serving as Editor-in-Chief, she is the Advance’s chief columnist, writing on women, LGBTQ people, the state budget, the economy and more. For almost five years, Susan was the Editor and Publisher of Inside Michigan Politics, the most-cited political newsletter in the state. Susan’s award-winning political analysis has run in more than 100 national, international and regional media outlets, including the Guardian U.K., NBC News, the New York Times, the Detroit News and MLive.