A new analysis of Gov. Snyder’s proposed tax plan shows that low-income families would see a far bigger impact from income tax increases than wealthy families in Michigan. In fact, the impact on Michigan’s poorest households would be more than 10 times greater than that on the wealthiest.

The poorest 20 percent of Michiganders would pay out an additional 1.1 percent of their income in tax each year, while the state’s wealthiest taxpayers would see their bills rise by just one-tenth of 1 percent, relative to their annual income, according to the analysis by the Institute on Taxation and Economic Policy, a Washington D.C.-based nonpartisan think tank.

Put another way, those 20 percent of households earning the lowest incomes in Michigan — $17,000 or less — will see their taxes climb as a percentage of their income by more than 10 times that of those in the top 1 percent of households earning $335,000 or more. The biggest impact on low-income families would come from the proposed elimination of the Michigan Earned Income Tax Credit.

“Gov. Snyder has discussed shared sacrifice as we struggle to make Michigan a competitive state again. But this new analysis is further evidence that he’s asking too much from vulnerable children and their families and seniors in order to give businesses a tax break,’’ said  Gilda Z. Jacobs, president and CEO of the Michigan League for Human Services.

A recent League analysis found that Snyder’s plan will cut business taxes by 86 percent while increasing income taxes 31 percent. It’s been estimated that only 41,000 of the 136,000 business that now pay business tax would pay under the governor’s proposals. The shift will increase taxes on seniors and working poor families with children. None of that increase will go to preserve vital services.

“Many people may not realize that we’re talking about a large tax increase on working families and seniors to pay for business tax cuts. The governor’s proposed budget still makes $1.5 billion in cuts, slashing per-pupil funding, revenue sharing and support to the state’s colleges and universities,’’ said Karen Holcomb-Merrill, director of the League’s state fiscal policy project. “Seniors, working families and kids are not being asked to sacrifice in order to make sure needed services are available. Instead, they’re being asked to sacrifice so that most businesses will not have to pay any taxes at all.’’

See the fact sheets: All Pain, No Gain and  Big Tax Shift.

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The League is a nonprofit, nonpartisan statewide policy and advocacy group for low-income citizens. It has a network of more than 1,500 representing business, labor, human service professions, faith-based organizations as well as concerned citizens.