The “shared sacrifice” new Gov. Rick “Chief Executive Outsourcer” Snyder talks about and budget cuts national Republicans want will only come from the middle class and the working poor.
National Republicans will continue the polices that are making the U.S. a banana republic and ushering in a new “Gilded Age,” and Snyder wants to kill the Michigan Earned Income Tax Credit (EITC), the most effective anti-poverty tool ever invented.
The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. In 1965 the average CEO was earning 24 times what the average worker was making. But by 2001 the C.E.O.’s of the largest American companies earned an average of 531 times as much as the average worker.
Despite that huge gap that continues to grow, Republicans forced an extension of the Bush-era tax cuts for the richest 2 percent in exchange for a 13-month extension of unemployment insurance benefits for people just trying to survive. That move will add more than $36 billon to the federal budget deficit.
In Michigan, while giving his cabinet large raises, Snyder proposed killing Michigan’s Earned Income Tax Credit for working people.
The Michigan EITC is a refundable tax credit given to working families. People apply for it when they fill out their state income tax forms. All families who are eligible for the federal credit are eligible for the state credit. The tax credit puts money into the pockets of hundreds of thousands of Michigan working families. The EITC brought $338 million into local communities throughout Michigan last year. That’s money spent directly into the local community on goods and services, not invested in offshore ventures.
“The Michigan Earned Income Tax Credit is a successful anti-poverty tool that helps low- and moderate-income families and small businesses in Michigan,” said Gilda Z. Jacobs, the President and CEO of the Michigan League for Human Services. “Eliminating this credit amounts to a tax increase on our most vulnerable families and will tax working people into poverty.”
The Michigan EITC is based on the federal EITC created by Republicans President Gerald Ford and expanded by Republican Presidents Ronald Reagan and George HW Bush. In fact, patron saint Reagan called the EITC “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”
In Michigan, the EITC went into effect for Tax Year 2008, and, ironically, the bill creating it was sponsored by one of the most rightwing lawmakers, former Sen. Nancy Cassis, R-Novi.
“As this debate continues, let’s remember the faces of those in our economy who are helped by this tool: janitors, housekeepers, restaurant workers, daycare and home health aides, cashiers and retail clerks,” Jacobs said. “These are the very people who often are in charge of our loved ones, or who make our days easier.”