Tuesday, February 8, 2011

The Republicans are Raising Taxes on the Middle Class

It turns out that Republicans found a tax hike they like. They're raising taxes on low to middle wage earners just a month after assuming office.

Oh sure, the GOP will scream like a train wreck at even the whisper of raising taxes on the top 2%. But taxing low wage earners is something they can't seem to do fast enough.

Michigan's newly elected Regressive Party government is getting rid of the Earned Income Tax Credit, a tax credit which reverses some of Michigan's extremely regressive tax code. Regressive tax code as in: Low wage people pay MORE of a percentage of their income in taxes than High wage people.

Michigan’s three-year-old tax credit for the working poor, worth $354 million in the current year, would be scrapped under Senate Republican legislation introduced today.

Michigan's economy has a Flat Tax, meaning that the higher your income is, the lower your tax as a percentage of your income once things like sales tax, gasoline tax, and to some extent property tax are included.

Michigan's rich, for example, pay about 5.3% in taxes to Michigan while a working class individual ends up paying about 10%. AS in, the more money you have, the less you're taxes as a percentage of your income. Why? Because sales taxes tend to affect low wage and middle wage earners more.

The argument made from folks on the right is that the Earned Income Tax Credits exceed the amount paid by the recipient, but that doesn't take into account things like sales tax on gas, toilet paper, soap, baby diapers, clothes...all paid to the state in tax form over the course of the year.

The Michigan Earned Income Tax Credit is a true tax credit to low wage earning individuals, evening out the upside down tax code that Michigan has which taxes low wage people more than high wage people.

And the Republicans are fine with that.

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