New House legislation could provide tax relief for Michigan’s working families

Bills introduced by Reps. Tom Cochran (D-Mason) and Kristy Pagan (D-Canton) last week, with supporting sponsorship from Rep. Yousef Rabhi (D-Ann Arbor), could revitalize the state’s Earned Income Tax Credit (EITC).

The EITC is a refundable tax credit for low and middle income individuals meant to offset taxes they pay on wages.

The legislation’s goal is to bolster the income of Michigan’s working families through restoration of the EITC to higher percentages. Cochran’s bill would set the EITC to 20 percent of the federal level, while Pagan’s would see that number jump to 25 percent.

“Michigan families work tirelessly for their paychecks, and they need relief when tax season comes,” Cochran said. “The Earned Income Tax Credit lets families keep more of their hard-earned dollars, so that they can buy things like clothes, groceries and appliances from local shops. Expanding the Earned Income Tax Credit is good for working people and good for Michigan’s economy.”

A Republican-dominated Legislature had changed the tax structure in 2011, leading to a reduction of the EITC from 20 percent to 6 percent.

“We can’t continue to balance the state budget on the backs of people who work hard day in and day out just to put food on the table,” Pagan said. “No one who works for a living, especially those working two or three jobs, should live in poverty. The Republican Majority continues to think up tax reforms that only help those at the top while leaving the rest of us behind. Restoring and raising the EITC will help families become self-reliant and self-sustaining, all while stimulating Michigan’s economy.”

Rabhi also said, in his support of the bills, that at its former level, the EITC helped tens of thousands of Michigan families put money back into the economy by lifting them out of poverty mode.

“If Republicans truly want the economy to thrive, then they should agree to provide real tax relief for the hardworking men and women across our state, rather than tax cuts for corporations and wealthy donors,” Rabhi said.

The legislation, as proposed, could help working families get back as much as $50 a month.

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