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http://www.mlive.com/politics/index.ssf/2011/04/michigan_working_poor_would_re.html

Low-income wage earners who would lose existing Michigan tax credits that average $425 a year scrapped in Gov. Rick Snyder’s business tax overhaul would pick up a new $25 per child tax credit in a compromise version.



Lt. Gov. Brian Calley told the House Tax Policy Committee that the administration supports the change. Coupled with expanded credits for rent and property tax payments, low-income residents would receive more than $100 million in tax benefits.

That’s less than a third of $350 million the Michigan Earned Income Tax credit currently provides. It’s proposed elimination by Snyder has received perhaps the most criticism. Advocates call it a tax increase on the working poor that will push more Michigan children into poverty.

Rep. Jud Gilbert, R-Algonac, chairman of the committee that could report the tax package out as early as next week, was an early proponent of the MEITC and suggested the $25 credit as an alternative.

Still, the amount doesn’t come close to matching the benefit of the MEITC. It equals the tax benefit of the current $600 per-child tax deduction, a break that Snyder’s plan also eliminates.

Calley said Homestead Property Tax Credit changes would also help low-income residents. Currently, seniors receive an income tax credit that offsets 100 percent their property tax bill that exceeds 3.5 percent of their household income. Non-seniors get a 60 percent credit. Those with household incomes that exceed $82,650 don’t qualify. A separate calculation for renters provides a similar benefit.

Under the changes, all residents with household incomes of less than $20,000 regardless of age would receive a 100 percent credit. Those with incomes of more than $30,000 would receive 60 percent. Those with incomes of more than $50,000 wouldn’t qualify.

The maximum credit of $1,200 would remain the same.

“None of these decisions are easy, but at the same time we recognized the difficulties people have in that income range surviving day to day,” Calley said. “There are things we can do to make a difference, not as much as we’d like to do or could have done back in the hey day. At the same time, back in the hey day, we didn’t have as much use for those kinds of programs because people had good jobs.”

Overhauling the business tax structure in a way that rewards the small- and medium-size firms in Michigan would transform the state’s economic landscape, he said. Some 95,000 firms would no longer have to pay a Michigan business tax. A 6 percent tax on profits would apply to about 40,000 “C-corps” that file a federal return.

“Across the board, this is fundamentally a game-changer for Michigan,” Calley said. “We’ve had 30 years of decline in this state, and no one has been willing to take a chance and do things differently.”

Tom Hickson of the Michigan Catholic Conference called the MEITC “a good program and we’re very supportive of the program as it is.”

As for the economic growth properties of business tax reduction, he said “it’s a tough argument, how do you prove it? We hope there will be good jobs, we hope this will turn the economy around. But there is always going to be a poor population, and it’s never going to change no matter what you do with the tax rate.”


25 bucks.....:laughing:
 

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"Advocates call it a tax increase on the working poor that will push more Michigan children into poverty."

Advocates WOULD say that, but they would be wrong. People who pay zero taxes could not possibly have had a tax increase. What they are getting is a reduction in their free money. I won't try to debate the merits of that, because I know nothing about Michigan's situation. But suffice it to say, there will be many many more moves like this from states across the country because the money simply does not exist to continue subsidizing every perceived need. There are two possibilities here as far as potential results. The article only lists one: pushing more children into poverty. The other possibility is that it will push more parents into searching for ways to support themselves.



 

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"Advocates call it a tax increase on the working poor that will push more Michigan children into poverty."

Advocates WOULD say that, but they would be wrong. People who pay zero taxes could not possibly have had a tax increase. What they are getting is a reduction in their free money. I won't try to debate the merits of that, because I know nothing about Michigan's situation. But suffice it to say, there will be many many more moves like this from states across the country because the money simply does not exist to continue subsidizing every perceived need. There are two possibilities here as far as potential results. The article only lists one: pushing more children into poverty. The other possibility is that it will push more parents into searching for ways to support themselves.



Either way...

they are not doing true reduction in govt waste, spending, redundant departments, jobs, unnecessary pork......like they said they would.

This is transfer of costs and will be outpaced by inflation in three years.
 
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