The Detroit Regional Chamber announces its support for expanding Michigan’s Earned Income Tax Credit (EITC) to a 30% match of the federal credit. In a time of high inflation, the Chamber believes a more extensive EITC expansion will be significant for Michigan, as it has a proven record of increasing employment, expanding local economies, and aiding small businesses.
The Impact of a Boosted EITC in Michigan
Michigan’s EITC supports working families earning up to a maximum of $57,000 a year – the 30% match would help 750,000 qualified families and nearly one million children in the state.
Therefore, expanding Michigan’s EITC would not only put more money back into the pockets of working Michigan residents but also help address the slow return to the labor force that is holding back Michigan’s economic recovery.
Research shows that Michigan’s EITC helps boost the labor supply by alleviating barriers like the cost and accessibility of child care, health concerns, and transportation costs that limit people’s ability to fully participate in the labor force.
Further, Michiganders would have an additional $460 million to be spent in local communities at grocery stores, hardware stores, pharmacies, auto shops, and more. This would benefit residents in every part of the state – rural and urban areas, all counties, both peninsulas, and every political district and jurisdiction.
A Strong Bipartisan History
Increasing the EITC would continue a long history of bipartisan support. The federal EITC, first signed into law by President Gerald R. Ford in 1975 after passage by a Democratic Congress, was later expanded by other presidents, including President Ronald Reagan.
The Michigan EITC was created in 2006 with a Republican-led legislature and a Democratic Governor. Today’s members of both parties, and Gov. Gretchen Whitmer, have publicly supported increasing the Michigan EITC over the past year.
Related: Chamber’s Brad Williams Testifies in Favor of EITC Expansion