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Give EITC to all generations

As families across Michigan prepare to come together this Thanksgiving to enjoy a meal and share in other family traditions, it has me thinking about the many generations that make up a family and how they all have unique needs.

It also has me thinking about how some generations have been excluded from receiving a powerful state tax credit that could go a long way in helping to ensure their unique needs are met.

As it stands today, there are tens of thousands of hardworking people in our state who don’t receive Michigan’s Earned Income Tax Credit (EITC), despite the fact that they pay taxes, meet income eligibility requirements, and are an integral part of what keeps our state’s economy running. That includes workers younger than 25 and older than 64 without qualifying children as well as immigrants who work and pay taxes but don’t have a social security number.

While the state’s EITC was boosted from 6% to 30% of the federal credit earlier this year in what was a monumental, years-in-the-making win for working Michiganders, the state continues to rely on federal eligibility criteria to determine who can and can’t receive that powerful state tax credit.

A number of particularly vulnerable groups have been harmed as a result, from the young adults who have aged out of foster care and are on their own for the first time to the growing number of young adults who are experiencing homelessness and many other working Michigan residents who are earning low wages and struggling to make ends meet.

Michigan’s EITC currently helps 740,000 households in our state — including approximately 4,820 households in Alpena, Alcona, Montmorency and Presque Isle counties — but it could help tens of thousands more if Michigan were to join the 11 other states in our country that have blazed the trail in expanding state EITCs to federally excluded groups.

Those states include Washington, Oregon, California, Colorado, New Mexico, Minnesota, Illinois, Maryland, New Jersey, Vermont and Maine. Of those 11 states, eight states offer age enhancements to their state EITC (expanded to include either young workers or both young and older workers) and 10 states, plus Washington, D.C., have expanded their EITCs to include those who file their taxes with an individual taxpayer identification number, the tax number assigned to immigrant workers who don’t have a social security number.

Expansion of Michigan’s EITC to include currently excluded groups would help reach more residents who are currently living below the poverty line in our state, which includes 21.5% of young adults ages 18 to 24, 20% of children in immigrant families, and 9.8% of adults ages 65 and older.

And expanding the EITC to reach young adults and seniors without children will especially benefit rural residents, including those living in and around the Alpena area, because wages are often lower in rural communities.

It would mean more money going back into the pockets of struggling Michiganders in every corner of the state, with an estimated 116,900 young adults receiving an average benefit of $100, an estimated 24,200 seniors receiving an average benefit of $54, and an estimated 5,650 individual taxpayer identification number-filing families — including 7,500 children — receiving an average benefit of $689.

That, in turn, would strengthen our state economy by keeping money flowing through local communities. And it would also make our state a more welcoming place for immigrant families at a time when Michigan’s immigrant population is contributing billions of dollars to the state economy and is an essential part of shifting our state’s current population path, which has and is expected to continue to grow more slowly than the rest of the country.

Expansion of Michigan’s EITC would also help reduce some of the inequities that exist in our state today as a result of historic and present-day racial bias and discrimination, with Black Michiganders facing the highest effective tax rates despite earning lower wages on average as a result of our state’s regressive tax system.

Here at the Michigan League for Public Policy, we fought hard alongside many dedicated advocates, workers, and policymakers for the state EITC boost to 30% of the federal credit, and we plan to continue to fight until our state EITC works as hard as the working people of Michigan, spanning all generations.

You can learn more and join us in our fight by checking out our latest fact sheet, mlpp.org/expanding-the-power-of-the-eitc, and contacting your legislators to let them know you support an expansion of the EITC to Michigan workers who are currently left out.

Monique Stanton is president and CEO of the Michigan League for Public Policy

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