Opinion | Michigan’s recent tax relief will boost women’s economic security

The last couple of years have been rough. Between the COVID-19 pandemic, day-to-day caregiving responsibilities and an ever-increasing cost of living, the stress is often difficult to manage. And for women who lack an above-average paycheck, good health insurance coverage, retirement contributions and paid time off fared far worse – even before the pandemic exacerbated constraints on work, care-giving and general wellbeing.

Shortly before the pandemic, the Michigan Women’s Commission surveyed women throughout the state about their greatest challenges. Economic security issues always topped the list, regardless of geography, age, family status or income level. Issues like the persistent wage gap, underpaying jobs in fields where women are overrepresented (such as home health care, domestic work and childcare), workforce absences for childbirth or domestic violence, less access to job benefits like health insurance and retirement contributions – among other challenges – all result in greater rates of poverty among women. These are problems that were only made worse by the pandemic.

Lowering MI Costs, recently passed by the legislature and signed by Gov. Whitmer, will help put more money back in the pockets of hundreds of thousands of women, especially those who have experienced the hardest hits to their economic security.

In 2011, working women had a financial lifeline ripped from under them when the Working Families Tax Credit – sometimes called the Earned Income Tax Credit or EITC – was gutted. This credit is intended to provide real relief to people working in low-paid jobs and could especially help women in jobs without many fringe benefits or whose pay doesn’t leave much wiggle room in their families’ budget. These families are often one missed paycheck or one medical emergency away from poverty. The Lowering MI Costs plan quintuples the Working Families Tax Credit delivering an average of $3,150 back to 700,000 Michigan families. That’s a true lifeline.

Michigan’s retirees were also blindsided in 2011 by a new pension tax – a 4.25 percent tax on retirement income that our parents and grandparents could not have predicted when they planned for their retirements. Currently, almost 20 percent of Michigan women are over the age of 65. That’s roughly 994,800 women of retirement age. Approximately 122,100 of them are over the age of 85 – nearly double the number of men in the same age bracket. Taxing retirement income is not only unfair, it is dangerous for folks already on fixed incomes and facing higher medical costs in their later years. Lowering MI Costs rolls back that retirement tax to save 500,000 households an average of $1,000 a year.

Together, the Lowering MI Costs plan delivers a $1 billion tax break to seniors and working families, helping more women overcome systemic disadvantages and find greater financial stability. The plan is a major step toward bringing much-needed economic security to more women all around our state, and to increasing Michigan’s economic prosperity as a whole. That’s a Women’s History Month achievement we’re proud to celebrate.