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Anti-Poverty Group: Hike Fuel Tax, Not Sales Tax

LANSING (WWJ/AP) - An advocacy group for the poor says raising Michigan's fuel taxes would be less harmful for low-wage earners than increasing the state's sales tax.

The Michigan League for Public Policy released a brief Monday, saying the sales tax is the most regressive state tax. Legislative leaders are considering a possible tax hike before year's end to improve the condition of roads.

The anti-poverty group worries that dedicating a portion of sales tax revenue for roads would limit the Legislature's ability to use the money for other government services. It says replacing per-gallon fuel taxes with a tax based on the wholesale price of fuel would have the "least harmful effect."

The group wants legislators to lessen the burden of any potential tax hike by restoring tax breaks for low-income earners.

"In Michigan, the Earned Income Tax Credit is one of the most effective ways to support working families and lift them from poverty. It is already in place and could be expanded, making it the best vehicle for protecting low-income working families from rising taxes," the group said in a statement. "Road funding proposals should make it easier, not harder, for workers to get to their jobs."

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