Earned Income Tax Credit Concerns

By: Meaghan M. Norman Email
By: Meaghan M. Norman Email

"I represent the working poor," a statement of pride from Lansing resident Ramona Spencer. She lives below the poverty line. Last year she made just over $13,000 and qualified for $609.00 because of the state Earned Income Tax Credit

"With that money I pay for my utilities, and I say, keep warm water running in my tub," said Spencer.

Gilda Jacobs, CEO of the Michigan League for Human Services says the EITC has been mischaracterized and its benefit overlooked.

"Instead of looking at the EITC as a percentage of the deficit, it really should be looked at -- big picture -- with all the other tax expenditures and loopholes and credits and deductions --- which are $34 billion."

But what about the $1.8 billion deficit? How does the state close such a wide gap when many think the state is just giving money away?

"We're talking [a savings of] more than 300 million per year, said Charles Ballard, economist and professor at Michigan State University. "If you were to eliminate the EITC, that would be one-sixth or one-fifth of the budget deficit so that's a portion --- certainly doesn't solve the problem by itself."

Ballard is a proponent of keeping the EITC intact, saying eliminating it would be a huge step backward.

"Until the EITC was instituted, Michigan was one of the most regressive tax systems in the country. The EITC took us off the list," said Ballard. "If we were to eliminate [it] we'd go back to being one of the 10 most regressive [states] and to me that's not a move in the right direction."

And many other economists say that the EITC isn't simply a handout, but an earned incentive to work.

"I feel like I"m already at the low end of the income here. I'm barely on the ladder," said Spencer. "I'm proud to say it's not a handout. I'm working. I'm earning it. I'm grateful it's there. I hope it doesn't get cut."

Governor Synder will be releasing his budget proposal Thursday morning. The EITC is one tax credit that is on the potential chopping block.


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  • by Sandra Location: Jackson on Feb 21, 2011 at 01:26 AM
    For all of you saying the credit should not be given anyway...would you rather the working poor who get this credit stop working altogether and become welfare recipients? Becasue many of them will, if this credit is taken away. I live in a low-income neighborhood (and yes, I work) and I know of many who continue working simply because of the yearly credit. This is what they use to purchase vehicles that get them to and from WORK. Whether or not you agree with the credit being deserved is beside the point. If it's taken away, your average single mom working at Taco Bell goes from making $14,000/year to $10,000/year. This is when she begins to need food stamps. This is when she can no longer afford to repair the car that gets her to work. This is when she gives up and quits her job. And that's when she moves into state-subsidized housing and begins collecting $500 on a Bridge card every month. To me, WORKING should be enabled and encouraged at all costs. This credit is one way to do that.
  • by RT Location: Lansing on Feb 18, 2011 at 03:21 AM
    This is to all of you whiners who've posted here in favor of the EITC...if you didn't pay income taxes you shouldn't get ANYTHING back. Does that hurt your sensitive little feelings...good!!! I'm tired of working to support those who don't have the gumption to make something better for themselves and wait for the check to come in from those who have and then expect more!
  • by Anonymous on Feb 17, 2011 at 09:04 AM
    It only effects those who already receive thousands from the state already.
  • by Lacy on Feb 17, 2011 at 07:00 AM
    Hello In case you Have not noticed there are more then Hundreds already living in Poverty here in Michigan! To many Homeless to count!
  • by Anonymous on Feb 17, 2011 at 04:08 AM
    Cut schools much more-many will close=many jobs will be lost. Cut more on the welfare programs-many will be homeless= landlords will have many empty properties & utility companies will loose more money.Cut programs to the social security people and mess up there taxes-more can loose homes,not be able to pay for needed things or meds or food or property taxes or even have any life but harm to them.None helps Mich recover but causes harm to humans.Is this going to work?NO.How about JOBS,the only answer to Michigans problems.I really don't understand how stupid some people are that are suppose to be educated.The Republicans have always been noted for caring about the rich only.So all who voted for our new governor,I hope you were rich.
  • by leave it alone Location: my living room on Feb 16, 2011 at 09:18 PM
    why do they always start at the bottom and cut instead of at the top? they take the most from those that have the least. these are people with minimum wage jobs struggling to make it. hey bailey talk about something for free what happens when these people can no longer afford to work? they will go on state aid yeah now thats gonna help
  • by Anonymous on Feb 16, 2011 at 08:55 PM
    Great plan rickie boy. Do you know how many people use the EITC to pay their property taxes? How in the world did ANYONE think this man would be a help to the hundreds of thousands of Michigan residents struggling to stay in the state they were born and raised in.
  • by yukon14 on Feb 16, 2011 at 08:10 PM
    How about the stab in the back to the middle class workers that earned the money and then had it taken from them via taxes only to see that same money handed out to someone else. Call it what you want, but its redistribution of wealth. If the state feels the money isn't needed to run the necessary operations, then give it back to those that paid it in.
  • by Penny Location: Lansing on Feb 16, 2011 at 06:49 PM
    Okay by getting rid of credit, it hurts the families that could really use it. Just a stab in the back to the families that went through all the foreclosures, having to get on aid from the state, THE WORKING CLASS. Or those who are trying to get back to work. No thank you to Mr. Gov.
  • by Bailey5239 Location: Charlotte on Feb 16, 2011 at 06:10 PM
    I totally agree with yukon14. If they didnt earn it they should not get it. When is the middle class familys going to get a break on there taxes? Tired of people getting things for free.
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