Today is EITC Awareness Day, and this year marks the 40th anniversary of the widely recognized tool that lifts millions of working families and children out of poverty each year. States have the opportunity to build on the federal credit, which Michigan does. However, in 2011 the state’s Earned Income Tax Credit was cut leaving behind over 15,000 families in poverty in 2012. On May 5, the voters will have the opportunity to restore the credit by supporting an increase in the sales tax by one penny.
The Michigan EITC is only available to families who have earned income from working. The credit ensures that working families are better able to make ends meet. When combined with the federal EITC, working families are lifted out of poverty and children experience better outcomes, such as improved infant and maternal health; better school performance; greater college enrollment; increased work and earnings in the next generation; and Social Security retirement benefits. All of which also benefit Michigan’s economy.
The EITC works to reduce the amount of taxes paid to help struggling families keep more of what they earn. However, when the state EITC was cut by 70% low-income workers experienced a significant tax increase and fewer families were able to move out of poverty. The restoration of the state EITC back to 20% will help these families, who include over 1 million children.
In May, voters will have the ability to do this. By supporting an increase in the state’s sales tax by one penny, people in Michigan will be able to help reduce poverty all while voting to reform and increase funding to fix our roads. As we recognize the 40 years of evidence backing the EITC, let’s spread the word about how we can strengthen it!
–Alicia Guevara Warren