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Since the 1970s, the gap between the ultra-rich, or top 1%, and everyone else has been steadily growing wider and wider. Here in Michigan, we have an opportunity to help working families across the state with an innovative measure tucked into Gov. Gretchen Whitmer’s budget proposal: restoring the earned income tax credit.

This is a significant opportunity to help working families across Michigan and give a boost to small businesses who are the real job creators moving our economy forward.

The EITC is a lump sum credit on federal income taxes for low-to-moderate income households. It was created in 1975 and famously expanded in the Tax Reform Act of 1986. Then President Ronald Reagan championed the EITC, calling it “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.” In 2006, lawmakers in Michigan passed a law that provided low-to-moderate income workers 20% of their federal EITC on their state income taxes.

Five years later, politicians took away this credit by slashing it to a mere 6% from the original 20% — all to help pay for one of the biggest corporate tax breaks in history at the expense of individual taxpayers. This move hurt hard working Michigan families.

In her budget, Whitmer is proposing to restore the Michigan EITC to 12%. Restoring the EITC will help hard working Michiganians provide for their families, earn a decent living and pump money back into the economy. When working families have more money in hand, they spend it in their local communities — which benefits everyone, including local grocery stores, restaurants and small businesses.

A 2009 report by the Anderson Economic Group commissioned by the Community Economic Development Association of Michigan and the Michigan Association of United Ways found that in Michigan, for every dollar received through the federal EITC, $1.67 is generated in new economic activity.

I applaud Whitmer for taking a stand for working Michigan families by restoring the EITC to 12%. I urge lawmakers on both sides of the aisle to support the governor in her effort to support the thousands of working families, mainly women, who would directly benefit from restoring the EITC. It will also help Michigan’s economy continue to grow in a way that benefits everyone, not just the few.

Ross H. Yednock, program director

Michigan Economic Impact Coalition 

Community Economic Development Association of Michigan

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