Wednesday, April 13, 2011

In Some States (including Michigan), Working Poor Could Pay More Taxes

Several states want to scale back or eliminate a tax credit for the working poor, as they try to balance their budgets. Anti-poverty groups say some of these same states also want to cut taxes for businesses.

Governors say they're trying to balance the need to promote jobs with deficit reduction. But advocates say the poor are being asked to bear an unfair share of the burden.

The tax break is called an earned income tax credit, or EITC. About half the states offer residents an EITC on top of a similar credit available from the federal government.

Ramona Spencer is a single mother of five who lives in Lansing, Mich. The state's Republican governor, Rick Snyder, has proposed eliminating the Michigan EITC, which is 20 percent of the federal credit.

"Four hundred dollars may not seem like a lot to a lot of people," Spencer says. "But when you are already living on the bottom rung of society, you feel the difference."

www.npr.org/2011/04/11/135320299/in-some-states-working-poor-would-pay-more-tax


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