LANSING – Increasing the state’s Earned Income Tax Credit would be a sensible way to provide some tax relief to the working poor if the state is going to increasing gasoline taxes to raise money for roads, the Michigan League for Public Policy said Monday.
Gilda Jacobs, president of the MLPP, urged the Legislature not to increase the sales tax as a mechanism for raising money for roads.
“A tax on wholesale fuel will also make it more difficult for workers to afford transportation as the price of fuel rises, but it is a far better option than a sales tax as a dedicated source of revenue,” Jacobs said in a statement calling the sales tax a regressive way to raise the funds.
Jacobs noted that as part of the 2011 tax overhaul, the state reduced the EITC to 6 percent of a filer’s federal EITC from the previous 20 percent level.
“For Michigan’s economic recovery to reach everyone, workers who can least afford additional costs to get to work should be protected,” she said. “Increasing the Michigan Earned Income Tax Credit would be a perfect vehicle to offset the additional costs on those who can least afford them. This will help workers stay on the job while making sorely needed repairs to the state’s roads.”
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