Hard work, the American dream and tax credits

Added September 8th, 2015 by Rachel Richards | Email This Entry Email This Entry
Rachel Richards

On Monday, we as a nation celebrated Labor Day. While—unfortunately—many people see it only as a day off of work, a day full of sales at the mall, and the last big grill out of the summer, Labor Day was actually established to pay tribute to the contributions and achievements of American workers. On a day that celebrates the value of work, it’s also a good time to reflect on two of our nation’s best pro-work tools and the workers they help. The federal Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) keep millions of working families out of poverty and support a diverse array of professionals across the country and around Michigan.

This fall, Congress has a critical opportunity to permanently extend key provisions of these pro-work tax credits that are set to expire. But if it fails to do so, 727,000 children in 415,000 Michigan families will lose some or all of their credits, and as a result, 176,000 children and 357,000 Michiganders will be pushed into—or deeper into—poverty.

According to a recent report, the EITC and CTC do not discriminate against industries or occupations; these credits help working residents in a wide range of jobs. The following Michigan workers could lose all or part of their credits if we let these provisions expire:

    • 70,800 cashiers and retail clerks;
    • 68,800 in the manufacturing industry, such as machine operators and welders;
    • 68,400 administrative assistants and other office support staff;
    • and 56,500 food service workers—such as waitresses, dishwashers and cooks.

Often seeing these numbers en masse distances one from the real people affected; however, likely everyone knows or interacts with someone who receives the EITC, the CTC, or both. It could be your regular waitress at your favorite diner who’s a single mom of two kids, or the cashier who rings you up with your Sunday groceries who’s a grandfather raising his grandson. It could also be your son’s preschool teacher or a parent’s home health aide. These are real working people in our very own communities who rely on these credits to help pay the bills, provide for their children, and pay for simple needs like groceries and transportation.

While Michigan’s urban workers are slightly more likely to claim the EITC than rural workers, poverty is not just an urban issue, and these credits are important to Michigan’s rural residents as well. According to Center for Budget and Policy Priorities estimates, in Michigan, 155,000 rural households received the EITC, the low-income part of the CTC, or both in 2013, and 86,000 would lose all or part of their credit if these key provisions expire. About 7,100 workers in the agriculture, forestry, and fishing and hunting industries, including the farm workers and loggers who are a big part of Michigan’s economy, could lose all or part of their credits.

The benefits of the EITC and CTC are undisputed. These tax credits encourage work, help lift families out of poverty, and improve the lives of children. Additionally, research shows children in families that benefit from the EITC and CTC are healthier, do better in school, are more likely to go to college, and earn more as adults.

The EITC and CTC only go to people who work, and they encourage employment and self-sufficiency. So when lawmakers return to work in Washington after Labor Day, a day when we recognize all of the hard work that Americans nationwide put into their jobs, lawmakers in Washington should do the right thing—protect our hardworking Americans and make these key provisions permanent.

— Rachel Richards


One Response to “Hard work, the American dream and tax credits”

  1. […] Earned Income Tax Credit (EITC) is one of my favorite topics to talk about (I’ve talked about it here, and here, and here, and pretty much to anyone who will listen). I didn’t have a chance to write […]

Leave a Reply