Letter: Expand Earned Income Tax Credit

Thursday, February 2, 2017

Editor’s note: This op-ed was initially published at DetroitNews.com.

By Herman Gray, President and CEO
United Way for Southeastern Michigan

In Michigan, 1 in 6 people live below the poverty line, and southeastern Michigan has the highest concentration of poverty among large metropolitan areas in the country. Lawmakers have the power to change that statistic by expanding the Earned Income Tax Credit (EITC).

The federal EITC is a pro-work tax credit that lifts families out of poverty by helping those with low to moderate incomes keep more of what they earn. Yet because the policy largely benefits workers with children, millions of hardworking people who already struggle to make ends meet are being taxed into poverty. In Michigan alone, roughly 249,000 low-income workers are not eligible for the tax credit. If our leaders in Washington really want to help the working people, they must act quickly to address the EITC by expanding it.

The benefits of the EITC are far-reaching, and there is already bipartisan support in Washington, D.C., that we can build upon. In 2015, the United Way for Southeastern Michigan joined a broad coalition of partners who successfully fought to secure the permanent extension of the EITC and Child Tax Credit through Congress. This victory positively impacted roughly 176,000 children and 357,000 adults throughout Michigan who will potentially reap the benefit for generations to come. But it’s not enough.

According to data provided by the Michigan League for Public Policy, roughly 125,000 new and established workers; 25,000 veterans; and 98,000 individuals working in rural communities will also profit. Once expanded, the EITC will also provide a boost to older workers, including those in retirement, who have adult children that are out of the home.

Throughout my nearly 40 years as a pediatrician, hospital administrator, and now as president of United Way for Southeastern Michigan, I have dedicated my life to causes that improve the health, education and financial stability of our community. At United Way, we receive many calls via 211 from individuals who are employed full time, but do not earn enough to make ends meet from their wages. Expanding the EITC would give these individuals and nearly a half million working men and women in Michigan financial ability to cover their basic needs, and the means to build a better future for themselves and their families. Additionally, studies show that workers typically use the extra funds gained from the EITC to buy necessities that support local businesses, which in turn helps Michigan’s economy grow.

We know that the EITC is a vetted measure to address poverty. I encourage the newly elected members of Congress to stand up for our workers by boosting the EITC to ensure that no one who works for a living is living in poverty.