Politics & Prejudices
The Gipper giveth, state GOP taketh away
Republicans find a tax break they don't like. It happens to help the poor.
Published: May 23, 2012
Once upon a time, there was a president of the United States who enthusiastically supported giving the working poor a break on their income taxes. The program, called the Earned Income Tax Credit, or EITC, "is the best anti-poverty, the best pro-family program ever to come out of Congress." He vastly increased it.
Soon, seeing how well it worked, a number of states, including Michigan, did the same. In our state's case, the most a family with three kids could make last year to get the credit was $49,077.
This money — totaling $344 million in 2009 — was not parked in banks in the Cayman Islands, Mitt Romney-style. Instead, pretty much all of it was immediately spent in the local economy.
Then last year, Gov. Rick Snyder took office and right-wing Tea Party types took over both houses of the Michigan Legislature. They very nearly eliminated the entire Earned Income Tax Credit.
Fortunately, slightly saner heads prevailed, and a severely cut-back program survived. Now, instead of getting to deduct 20 percent of their state taxes, those eligible can deduct only 6 percent.
Michigan already had a regressive tax system. Lower-income people pay a higher percentage of their income than the rich, which makes sense only if you think government is supposed to punish them for being poor. This makes things worse.
According to the nonpartisan, nonprofit Michigan League for Human Services, cutting the EITC means a tax increase for the working poor of almost a quarter of a billion dollars, when you consider that their tax cut now falls to a mere $109 million.
Apart from simple unfairness, there is actually a precise technical term for the decision to cut the EITC: damned stupid.
For one thing, this hurts small business almost as much as it does the working poor. The Anderson Economic Group, no bastion of liberal propaganda, calculated that every dollar returned to the working poor has a "multiplier effect" generating $1.67 in economic activity when they spend it. Now, they don't have it to spend.
Gilda Jacobs, the president and CEO of the League for Human Services, says this will cost small businesses in poor tortured Detroit an estimated $22 million this year; another blow falling on a bruise.
Ironically, it may hurt poor rural regions upstate even more. "Many lawmakers don't realize the impact that the EITC has on [such] regions of our state, particularly in northern Michigan, which have high levels of poverty," Jacobs said. "Cutting the EITC may well put out of business some small businesses, such as independent grocers, small auto repair shops and second-hand stores that cater to low-income working families in rural communities," she added.
Among the districts heavily impacted, the league calculated, were those represented by GOP state senators John Proos of St. Joseph, Dave Hildenbrand of Lowell, Mike Nofs of Battle Creek, and Roger Kahn of Saginaw Township.
There is, however, no sign they give much of a damn. Most Democrats themselves haven't done nearly enough to defend the interests of working families. One exception: state Rep. Phil Cavanagh of Redford Township. Three months ago, he introduced a bill to fully restore the EITC tax credits. He, and it, have been ignored.
Republicans control all branches of government in Lansing, and have no interest in even scheduling hearings on anything that conflicts with their agenda. Never mind if, as in this case, it might be something that would help the state, or their fellow Republicans.
Never mind that the Earned Income Tax Credit has been proven to work both in theory and practice — it gives people a tax cut, which is to Republicans what the finest heroin is to a drug addict.
The EITC helps the economy; helps business. But today's Republicans evidently hate the poor so much they are willing to inflict widespread damage in an attempt to punish the needy.
By the way, speaking of out-of-touch liberals: So who was the president quoted at the start of this column?
Lyndon B. Johnson? Franklin D. Roosevelt? Bill Clinton?
Not exactly. It was the GOP's patron saint, Ronald Reagan.
Whatever happened to ... Hansen Clarke's campaign for Congress? Two years ago, the charismatic-if-mercurial state senator from Detroit did what nobody else had been able to do: He defeated former U.S. Rep. Carolyn Cheeks-Kilpatrick in the Democratic primary. Then, he went on to win a crushing victory over his Republican opponent.
This year, Michigan lost a seat in Congress. So the Legislature responded by throwing several Democratic incumbents together, to make sure at least one gets eliminated. Sure enough, Clarke and Gary Peters ended up battling it out in the new gerrymandered 14th district, which stretches from the Grosse Pointes to Keego Harbor, by way of Farmington Hills, Southfield, Pontiac, West Bloomfield, southwest Detroit and other places. This race should have been a real toss-up.
Slightly more than half the eligible voters are black; slightly more than half live in the suburbs. Most thought it would come down to whether black voters would turn out in adequate numbers, and whether Hansen Clarke's charm could win over suburbanites. Yet, more than two months before the Aug. 7 election, there is a clear feeling in many places that Peters has it wrapped up.
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