Michigan Is One of a few States Raising Taxes on Working Poor

Michigan is among just a handful of states raising taxes on low-income working families while cutting taxes for other groups, the Center for Budget and Policy Priorities said in a report released Tuesday.

The Washington-based group notes that Michigan, New Jersey and Wisconsin all have scaled back tax credits for low-income workers in recent years while cutting business taxes. In Michigan's case, low-income families will see their tax breaks shrink starting next year by about $260 million annually while businesses will get a $1.1 billion tax break starting in January and a $1.7 billion tax break the year after.

Michigan Gov. Rick Snyder originally wanted to eliminate the state Earned Income Tax Credit, but agreed to reduce it from 20 percent of the federal credit to 6 percent for tax year 2012. He said earlier this year that the state needed to make cuts to balance the budget and noted no cuts were being made in Medicaid programs providing health care to low-income working families. He also has said the business tax cuts will create jobs.

But the Michigan League for Human Services, which opposed shrinking the EITC, said the change is bad policy.

www.cnbc.com/id/45314876

Additional information and the full report from the Center on Budget and Policy Priorities can be found at:

www.cbpp.org/cms/index.cfm?fa=view&id=3620