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Report: Mich. low-income families to pay more tax

LANSING, Mich. (AP) -- A new report says Michigan's low-income working families will pay an estimated $244 million more in state income taxes next year because of reductions in the state's earned income tax credit.

The Michigan League for Human Services released the report Monday. It says the state earned income tax credit in 2009 reduced taxes for low-income families by $349 million, but that saving will drop to $104 million for 2012.

Lawmakers last year reduced the credit from 20 percent of the federal earned income tax credit to 6 percent.

League President Gilda Jacobs says the smaller credit "may well put out of business" stores such as independent grocers, small auto repair shops and secondhand stores that cater to low-income working families in rural communities.

About 800,000 Michigan households claim the credit.