Gilda Z. Jacobs

Regardless of political party, elected officials like to tout their support of working families. But when it comes time to turn campaign trail promises and stump speech rhetoric into action and results, there’s usually a disconnect. “Working families” are used as the sizzle, but the wealthy usually get the steak.

This stark bait-and-switch was on full display with the 2017 “Tax Cuts and Jobs” Act (TCJA). Billed as a way to help workers and create jobs, the federal tax law really helped wealthy residents and corporations get richer. In Michigan for 2019, more than half of the tax benefits of the TCJA went to the richest five percent of Michiganders. And according to the national Institute on Taxation and Economic Policy, the average tax cut for 2020 will be a mere $50 for the state’s 20 percent lowest earners, and stays in the hundreds or less for more than half of the state’s earners.

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Meanwhile, the same research shows that the richest 1% in Michigan are expected to get an average tax cut of $52,230 in 2020.

That’s almost three times what some full-time workers in Michigan make in an entire year. Between rent, healthcare, groceries and transportation, many Michiganders working hard for low wages are barely making ends meet, and certainly don’t have much left to invest in making their families stronger.

U.S. Rep. Dan Kildee recognizes that the needs of most of Michigan’s working families are still going unmet. He’s introduced a bill that will help working people and others struggling to get by. And Michigan Sens. Debbie Stabenow and Gary Peters continue to fight for Michigan workers in Washington as well, cosponsoring the Senate version of this bill.

The Working Families Tax Relief Act would expand the federal Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), which have already been proven to lift many Michigan and American families out of poverty. These tax credits put money in the pockets of working people and boost our local economies.

We’re grateful to Kildee for leading the way with this bill. It would make progress on fixing our nation’s tax code to work for working people, and according to the national Center on Budget and Policy Priorities, it would boost the economic well-being of over 46 million households and 114 million people, including 49 million children. It would also lift 7 million people out of poverty, including 3 million children. In Michigan, the bill would benefit almost 3.5 million individuals, including almost a million and a half children.

What’s particularly smart about this measure is that it relies on tools that we know are effective. The EITC and CTC are proven solutions to reduce poverty and strengthen communities, so it’s logical that they should play a central role in helping to repair the damage that the TCJA has done.

The Working Families Tax Relief Act builds on these successful tools by expanding the EITC for working adults who aren’t raising children in their home—including noncustodial parents who are still working to provide for their kids—and extending the credit to workers without children under age 25. These young workers are just starting in the workforce and want to begin building and saving for the future, but many of them are held back because their small (or nonexistent) EITC means they are taxed into or deeper into poverty. The Working Families Tax Relief Act would fix this long-overlooked problem in our tax code.

Rep. Kildee’s bill also addresses another significant problem in our federal tax code: Because the Child Tax Credit is not fully refundable, Michigan families with the lowest incomes get the smallest CTC, or no CTC at all, even though they could use the tax credit the most. The Working Families Tax Relief Act fixes this problem and increases the CTC for families with young children, who face the high cost of child care along with all the additional challenges of adjusting to family life. A higher CTC for families with young kids also benefits the children themselves. A child’s early years are critical for their development and research indicates that more adequate family income during that formative time can make a big difference and improve children’s life opportunities.

To help build momentum for this important legislation to help working families, we’re urging all of Michigan’s members of Congress to support Rep. Kildee’s bill. Working families are the heart of Michigan’s economy, and it’s time for Washington to put them at the heart of our tax code. The Working Families Tax Relief Act will do just that.

Gilda Z. Jacobs is president and CEO of the Michigan League for Public Policy.