The federal Earned Income Tax Credit is considered to be one of the best tools available to help lift people out of poverty – but it could be doing more.
The EITC allows eligible low-wage workers to keep a larger portion of their income instead of paying it as taxes. But Kyle DuBuc, director of public policy and advocacy for United Way for Southeastern Michigan, said the credit goes to working families, leaving out nearly a half-million people in the state who aren’t raising children in their homes.
“If we are going to lift up our community and ensure we have a healthy, functioning economy that includes everybody,” he said, “we can’t have folks strong enough to work every day and then still living in poverty and struggling to make ends meet.”
Today is National EITC Awareness Day.
DuBuc said expanding the EITC would benefit young workers, veterans, rural residents and older workers who are in between raising children and retirement. United Way and the Michigan League for Public Policy also support extending the credit to include childless workers. Some congressional leaders, including House Speaker Paul Ryan, R-Wis., have shown support for the idea.
DuBuc said United Way works with Michigan families fighting to gain a financial foothold, and that the EITC helps them keep more of their earnings to pay for necessities such as food, housing and transportation.
“We just know from working one on one with them what a tremendous impact the Earned Income Tax Credit has,” he said, “and expanding that to childless workers will go a long way toward financial stability of those individuals and allow them the opportunity to improve their job prospects.”
It’s estimated that in 2015, the EITC helped lift more than 30 million Americans, including nearly 13 million children, out of poverty.
Michigan also has a state EITC, but it has eroded over the years. An effort to eliminate it in the 2015 Legislature failed. Information about the Michigan EITC is online at taxcreditsforworkersandfamilies.org.