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MI Groups: New Census Data Underscores Need for Higher EITC

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Wednesday, June 15, 2022   

The latest county census data found Michigan's child poverty rate remains at 19%, and groups advocating for children and families say it is time to raise the state Earned Income Tax Credit (EITC).

Michigan residents are grappling with inflation, including high prices for food and gasoline, increased costs of child care and other basic needs.

Monique Stanton, president and CEO of the Michigan League for Public Policy, said the census figures show now is an important time to put money into working families' hands. She noted nearly every aspect of children's lives improves when their parents are on better financial footing.

"The amount of the tax credit that you get increases based on the number of children that you have, and it's also impacted by what your particular income is," Stanton explained. "In Michigan, we have a rate of only 6% of the federal credit, that's one of the lowest rates across the country. And we have an opportunity to substantially increase the rate."

Stanton noted lawmakers are introducing increases of 20% to 30%. She pointed out children of color have higher poverty rates, roughly two to three times higher than for white children, and the EITC is one strategy to reduce childhood poverty rates equitably.

Matt Gillard, president and CEO of the group Michigan's Children, acknowledged the state has long struggled with high poverty rates for families with children, even before the pandemic. He said because the money from the EITC often goes right back into the local economy, bipartisan groups of lawmakers and the business community are in support.

"Putting this money back into the hands of working families dramatically improves their position and their situation," Gillard emphasized. "And helps them meet the costs of raising children, and helps benefit the lives of those children, but also help helps local economies."

Studies have shown greater access to the EITC leads to lower rates of infant mortality, offsets some racial disparities in the tax system and can even lead to greater earnings for children later in life.

It has been shown to improve test scores, especially for boys, children under 12, Black and Latino children and those with unmarried parents.

Disclosure: The Michigan League for Public Policy/KIDS COUNT contributes to our fund for reporting on Budget Policy and Priorities, Children's Issues, Livable Wages/Working Families, and Poverty Issues. If you would like to help support news in the public interest, click here.


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