LANSING – Despite Michigan House Tax Policy chair Rep. Jud Gilbert’s opposition to eliminating the Earned Income Tax Credit, it is still part of the tax incentive package, in all totaling $768 million, that House Speaker Jase Bolger said will be reviewed by lawmakers in the coming weeks.
Gilbert (R-Algonac) said the committee will review the state’s various tax incentive programs, but much will depend on what Governor Rick Snyder rolls out in his budget presentation next week.
While House Republicans have called for eliminating the Earned Income Tax Credit along with a review of other tax incentive programs to possibly cap or eliminate as well, Gilbert personally opposes elimination of the EITC.
“I am at odds with many in the caucus,” he said, but believes it’s a program that’s helping the working poor.
But Gilbert said his committee plans to meet jointly with the House Commerce Committee to educate members about the incentive programs and how they work and a lot of that discussion will hinge on Snyder’s budget and its inclusion of any changes to those programs.
There has no been no repeal of the EITC introduced in the House, but the Senate does have legislation already in the hopper and Gilbert said the committee would have to review the bill if the Senate acts.
“There are so many variables,” he said in terms of what will shape the future discussion on tax incentives.
Gilbert said he expressed his position on the EITC to Bolger (R-Marshall) before his appointment as Tax Policy chair. Asked Monday whether Bolger may refer a bill repealing the EITC to another committee, a spokesperson for the speaker said Bolger and Gilbert have spoken at length about the issue.
“Rep. Gilbert’s concern was about singling out the EITC while possible preserving business tax credits,” Ari Adler said, but Bolger wants to cap or eliminate some business tax credits as well. “He has a commitment from Representative Gilbert in addressing the tax structure and making Michigan more competitive.”
On Monday, Bolger said the House will examine more than $430 million in business tax credits which are based off a list the caucus released last month (brownfield, film, anchor company, food retailer, historic preservation, Michigan Economic Growth Authority, hybrid technology research and development, Next Energy, renaissance zone, Obsolete Property Act, logistic facilities, SmartZones, Neighborhood Enterprise Zones and battery production).
With the EITC costing $338 million a year, the total review of tax credits will be more than $768 million. The state faces a $1.8 billion budget deficit for the 2011-12 fiscal year that begins October 1.
“Taxpayers can no longer afford the status quo, which traps people and businesses in a cycle of dependency instead of enabling an environment where they can flourish,” Bolger said.
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