Many States Tax Working-Poor Families Deeper Into Poverty

[AlphaCentauri]

Source: Center on Budget and Policy Priorities

Poor families faced income tax bills that pushed them deeper into poverty last year in nearly half of the states with an income tax, according to a new report from the Center on Budget and Policy Priorities. Income tax bills on poor families in those 18 states range from a few dollars to several hundred dollars, which is a significant amount for a family struggling to make ends meet, the report said.


"In today's economy, low-income families are finding it more difficult than ever just to make ends meet," said Jason Levitis, the report's co-author. "Collecting income tax from these struggling families makes it even harder for them to work their way out of poverty."


The report measures the "tax threshold" in each state the income level at which families begin owing income taxes. In 18 of the 42 states that levy an income tax, the threshold for two-parent families of four was below $21,203, the 2007 poverty line for such a family. The remaining states as well as the federal government do not tax working poor families.


The number of states that taxed poor families was one fewer than in 2006, as New Jersey adopted an earned income tax credit (EITC) improvement that pushed its threshold above the poverty line. A number of other states made significant improvements. But income-tax treatment of the poor worsened elsewhere as inflation eroded the value of provisions intended to protect the poor from taxation.



Read more: http://news.yahoo.com/s/usnw/20081029/pl_usnw/many_states_tax_working_poor_families_deeper_into_poverty

[xchrom]

1. recommend

[uppityperson]

2. k&r

[formercia]

3. Even without an income tax, the poor pay a disproportionate amount of taxes.

Sales, property and excise taxes are a good example.

[fascisthunter]

4. .

[Joe Chi Minh]

10. They should not have to pay ANY tax. That has long been asserted by

people with humanitarian concerns. Why should they when a couple's combine income from four to eight jobs wouldn't pay the weekly bill for wine and spirits of a wealthy family? Or fill their vehicles' petrol tanks?

[slackmaster]

19. Taxation is just one facet of how the poor get nickle and dimed to death

They often use check-cashing stores that charge ridiculous fees; get "payday" loans at usurious interest rates; have to buy consumable goods in small quantities at local mom and pop shops, etc. etc. etc.

[formercia]

21. How can one attain the 'American Dream' when beaten down?

The poor are preyed upon because they have not the means to fight back.

The 'American Dream' is a myth, save a few who are connected, lucky to be in the right place at the right time or bright enough to get scholarships to good schools.

I think Obama will be a good example for the disadvantaged because he is proof that it can be done.

Getting past the despair of poverty is a big part of the battle.

[slackmaster]

22. I know a few families in my 'hood who are poor

Welfare moms abandoned by deadbeat dads, or disabled; Section 8 housing, the whole nine yards.

Only their children really have any hope of getting out of it. The only way they can starts with getting a good education. Unfortunately most of their teenage kids don't seem to be getting it even though opportunities are available. Girls get pregnant right after high school (or sooner), their boyfriends ditch them, the cycle starts anew.

[tama]

5. Yet

the "poorest" pay no taxes at all. :)

[Wabbajack_]

17. Unless they buy anything like food

[tama]

18. Dumpsters are full of feed n/t

[pitohui]

24. that hasn't been true since about 1990, try it before repeating an outdated talking point

the dumpsters around here were modernized in the late crack era of the late 80s/early 90s -- they are COMPACTORS and they are locked

if there is any food there, you can't get it from here

this from one who used to make extra $ buying and selling from dumpsters

it's dead, jim, people who couldn't keep their mouths shut killed it -- well, them and the insurance companies that found out about it

people who tell others "oh honey just get a pizza out of a dumpster" is about like those people who say "oh yeah you can travel for free as a courier" -- it was true in somebody's childhood but those days are over

do you have any buggy whips left for sale while you're at it? or maybe you can advise the poor to cook and eat their horses!

sorry to be :sarcasm: but people need to be called on outdated advice, there is no more free food behind the winn dixie, 'kay, thanks!

[tama]

26. That bad there?

Had no idea. The most totalitarian system ever getting perfected, categorically denying any and each form of freedom and liberty, making sure that each and everybody is totally dependent slave to the system.

FUCK THE SYSTEM! LET THE SYSTEM PAY ALL IT'S KARMA DEBT IN NO TIME! (Well, let's say in couple years... :))

PS: Do you know what the recycled organic "waste" is used for, in places where there is recycling? Composted to produce soil for lawns.

[whistle]

6. Should states even be allowed to have income taxes on individuals?

...I never could understand the rationale for states and even major cities putting a tax on individual incomes when they have so many other avenues to tax including property, real estate, sales taxes, gasoline, alcohol, tobacco, luxury items, dog tags, various fees and licenses, tolls, etc.

[clear eye]

8. Income taxes at least have the potential for being less regressive than those others.

A common U.S. tragedy is the consequence of having school districts almost entirely dependent on property taxes. Sometimes it leads to severely underfunded and dysfunctional schools in lower income districts where property assesments are low; other times lower income homeowners, including the elderly, lose their homes because the can't pay the taxes in a better neighborhood. Income tax can be done so it protects lower income people. The point of the article, I think, is that is that in some states the tax formula can and should be improved.

[Hestia]

11. Nothing would happen at all in this state without taxes - too small

of a state, but our tax system is horribly regressive to the poor, plus we have to pay income tax on any refund from the state.

[The2ndWheel]

20. You don't understand the rationale of more money?

Does any organization ever say they have too much money?

[GinaMaria]

23. you would think so

our property tax just doubled and sales tax is at 10.25% in Chicago. There is no income tax in the city but there is in the State. The poor can't afford to be poor with a 10.25% tax on sales

[dothemath]

7. one hand giveth, the other hand taketh away ...........

And if you think for one second that politicians in every state don't have 'all hands on deck' working on figuring how much residents of their state will no longer have to pay Uncle Sam so they can raise income taxes in their states at least as much and probably more,
you are one hell of a lot dumber and more naive than the average 3rd grader who can kick your ass on just about any question that is asked.

Reliance on the ignorance of the American people long ago stopped being a cottage industry and became the starting point for every larcenous scheme that can be dreamed up. The only thing left is finding a way to make a profit from grave-robbing - and that, my friends, will become a 'bubble' down the road.

[Veritas_et_Aequitas]

9. It's disturbing and sad.

I found this bit of information in particular disheartening:

The number of states taxing extremely poor families of four -
those with incomes below three-quarters of the poverty line
($15,902) - increased from six in 2006 to nine in 2007. Three
states that previously exempted such families began taxing
them: Georgia, Illinois, Ohio. They join Alabama, Hawaii,
Indiana, Michigan, Montana, and West Virginia in taxing
extremely poor families.

[Bluenorthwest]

12. The least of these...

nt

[clear eye]

13. This is partly the result of Bush-era cuts to state programs

like education, the police (w/the exception of bizarre crowd control equipment), maintenance of infrastructure, etc. That's why, when some people question Obama's need to raise taxes on corporate profit and the ultra-wealthy, they are missing the effect of passing on to the states the cost of essential services.

[One_Life_To_Give]

14. Symbolism??

There is something positive about everyone having something in the collective pot. It may be nothing more than a token, but the symbolism of having paid your share for the governments operation has value.

Where working poor seem to get caught is the perception that because they get "something for nothing" on the Income Tax. That their entire tax burden is perceived to be negative, which is hardly the case. However it might be more pallatable to some if instead of the EIC they received a rebate/discount on Sales/Use/Property taxes.

[pitohui]

25. i don't like the symbolism of the rich taking a meal from a poor family, sorry

i know of people who are expected to survive, with lifelong physical and/or mental handicaps, on a few hundred dollars of month of assistance -- a sum of money that even the sharpest, most athletic and fast-moving young person would have trouble surviving on

sorry it's wrong, it's just freaking dead wrong

"everyone" shouldn't have to chip into the collective pots when some "everyones" have no benefit of being born into this society whatsoever

it's pretty simple, to those who have been given much, they need to give back more and i really don't care if they have to cut back on bidding on rare $20,ooo bottles
of wine as a result

the "token" few dollars you take from a desperately poor person's pocket may be that person's food for the day -- or medicine for the week

let us leave superstition and symbolism to folklore class and treat people with simple human kindness

it is not right or kind to ask more than people can bear

[Suspicious]

15. We don't qualify as poor, but

I definitely think we qualify as lower middle class. Our combined income is less than $100K (not just barely under, either...), and we have two children, one of whom we are trying to put through college (we can only afford community college - a university is out of the question).

I received a notice from our City Treasurer the other day that I owe them nearly $1,000 in income tax from 2006. This is on top of the income tax we already paid the city (not to mention the nearly $4K we pay annually in property taxes for a house valued at less than $100K).

We live paycheck to paycheck as is, and just had to borrow a bit of money to pay off a STATE tax bill we received notice that we owed a couple of months ago due to an error in our return (plus tons of interest and penalties, of course) - thankfully, the IRS kept our stimulus payment over the summer, and it paid off the remaining portion of the $1,500 the federal government said we owed them due to that same error, or I would have been trying to pay both of those tax bills off and never getting past the interest every month.

I don't mind paying my fair share, but when I see people making annual salaries in amounts that I will NEVER make in my lifetime being given taxpayer dollars by the billions, my blood boils.

It should go without saying that anyone who is at or below the poverty level of income should not be paying one red cent in income tax. :mad:

[Laelth]

16. Georgia does. It's disgusting.

I favor the state income tax, but ours isn't progressive enough. It hurts the poor.

The United States is a LIBERAL Country.

:dem:

-Laelth