LANSING, MI – There's a fight brewing at the state Capitol over the future of the new tax break that goes to working poor families. Both Governor Granholm and state Senate Republicans are eyeing the Earned Income Tax Credit as a source of revenue to restore some budget cuts.
The governor would make this year's increase in the credit more modest and use the savings to restore the Michigan Promise college scholarship. State Senate Republicans would freeze the credit at its current level and use the money for schools, and to cut the Michigan Business Tax.
But Sharon Parks of the Michigan League for Human Services says both approaches are wrong as a lot of low-income working parents are dealing with pay cuts and reduced hours.
"I just think it's the wrong time in this economy to cut a credit for working families who are struggling," Parks says.
More than 700,000 filers claimed the credit this year. Parks says a better option would be freezing the personal exemption, which would cost every family in the state about four dollars next year to help restore funding for schools.