LANSING – Even though her organization would fight “tooth and nail” to keep the earned income tax credit around, Michigan League for Human Services CEO and President Sharon Parks said Friday lawmakers should have some process for periodically reviewing all of the tax credits that are available.
Parks, speaking on Michigan Public Television’s “Off the Record,” said lawmakers shouldn’t cut the EITC because it solves a public purpose of mitigating some of the problems for low-income wage earners under the flat income tax rate.
While she honed in on the various business tax credits available, business groups have argued those credits also mitigate problems companies face with their tax code.
The League has been advocating for a host of changes to the state’s tax law, including instituting a graduated income tax, expanding the sales tax to services and hiking the beer tax, in order to fix the ongoing budget deficits the state has and its effect on the social safety net.
Parks said there is a disconnect between tax policy committees and the members who appropriate state dollars each year and instituting a system of review for the numerous state tax credits would provide “transparency to the process.”
“You can’t do the silent spending,” she said of creating tax credits.
Parks rejected the idea that changing the tax code equates to a tax increase, even though she said $3 billion should be raised over the next three years to fix the structural deficit, arguing it all depends on how the tax is structured.
For instance, she said with the League’s proposal for a graduated income tax, 90 percent of filers would be better off than they are under the flat 4.35 percent rate now.
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