[This post is from Ross H. Yednock, Director of the Asset Building Policy Project.]
A lot has happened in Lansing in the last month, all of which seems to deal with how we choose to fund state and local government.
The big news in the asset building world is that the Michigan Earned Income Tax Credit was preserved, albeit at a much lower rate (it will now be 6 percent of the federal EITC, as opposed to 20 percent). Other developments include the elimination of nearly all business and personal income tax credits and deductions, including brownfield and historic tax credits and credits for individual contributions to individual development accounts and charities. In addition to these major changes, Michigan businesses will no longer pay the Michigan Business Tax (some will pay a corporate income tax, but in all, businesses will pay $1.7 billion less in taxes next year) and retirees will now have their pensions taxed.
What does this all mean? I guess it depends on who you ask. Some argue this will create more jobs and stimulate the economy while others fear community development and asset building efforts will face greater challenges. One thing for sure is that the old way of doing things will change.
I do want to point out, however, that victories like the preservation of the Michigan EITC were a result of practitioners, advocates and recipients coming together to voice a coordinated message that explained the importance of policies that provide working families a hand up. Moving forward, we (CEDAM, you, me, all of us) will need to continue to communicate and stay informed if we are going to continue to help impact public policy and improve practices to help working families achieve sustainable financial security.
