Guest Viewpoint: Increasing Earned Income Tax Credit Benefits All

In the state Capitol, our organizations often advocate on the opposite sides of issues. But both of our organizations are in the business of a stronger Michigan, and the right combinations of policy, opportunity and need make it easy to put differences aside in pursuit of the greatest good for Michiganders.

And as we look collectively for the policies that can have a significant return on investment for our Great Lakes State, benefiting workers, businesses and the next generation, increasing the state Earned Income Tax Credit stands tall.

This is not the first time the Earned Income Tax Credit has brought together unlikely allies. In fact, it’s one of the EITC’s hallmarks. The federal EITC was signed into law in 1975 by Michigan’s own President Gerald R. Ford, a Republican, and a Democratic majority in Congress, and has continued to have strong bipartisan support. It’s been expanded by nearly every president since, and has been embraced by both political parties’ paragons, Presidents Ronald Reagan and Barack Obama.

In addition to the federal EITC, a state EITC based on the federal credit was established in Michigan in 2006 under similarly bipartisan circumstances. Michigan’s EITC was created under the legislative leadership of Republican Senate Majority Leader Ken Sikkema and House Speaker Craig DeRoche, passing the Legislature with 141 of 144 total votes, and was signed into law by Democratic Gov. Jennifer Granholm.

With a Republican majority in the Legislature, Gov. Gretchen Whitmer in the governor’s office and expanding the EITC sitting on both branches’ priority list, Michigan is poised to add another positive, across-the-aisle chapter to the credit’s history.

Expanding the state EITC can be another defining moment in Michigan’s history. As relatively new leaders of longstanding, well-respected organizations with 173 years of combined policy activity and advocacy, we believe there’s a great opportunity and a great responsibility before us.

In addition to serving our respective constituencies and being a unifying voice for the people and organizations we represent, part of our charge is helping shape sound, pragmatic public policy that benefits our entire state. Increasing the state EITC addresses the core tenets of our respective entities, promoting individual economic security, supporting kids, workers and businesses, and encouraging economic activity simultaneously.

One of the reasons the EITC resonates on both sides of the aisle is that it is concurrently anti-poverty and pro-work, and has a two-pronged impact on job providers in addition to the benefits on individual households. The EITC has a proven track record of pulling people into the workforce, making it particularly relevant at a time when many employers are having difficulty filling available jobs. It also provides help to working families struggling to make ends meet by boosting after-tax incomes, pulling Michigan families above the poverty line and generating real, long-term positive effects on children.

Research indicates that families mostly use the EITC to pay for necessities, like home or car repairs, groceries, new appliances, gas and more.

All Michiganians have a vested interest in the future of our state and the policies that stand to make it brighter, regardless of our political affiliations, our policy interests, or our personal standing. Increasing the state EITC will help workers, small businesses and local economies while benefiting Michigan’s next generation.  Investing in the EITC offers policy that bridges the political divide and benefits workers and businesses alike. As our elected officials finalize tax changes and budget decisions in the coming weeks, we hope that increasing the EITC will continue to be the common ground that can help all thrive.

Jim Holcomb is president and CEO of the Michigan Chamber of Commerce. Monique Stanton is president and CEO of the Michigan League for Public Policy.