Some States Scaling Back Tax Credits for Low-Income Families
Measures Would Increase Poverty, Slow Job Growth
By Nicholas Johnson and Erica Williams
Facing large budget shortfalls, a small number of states have taken steps to scale back tax credits for low-income working families, which not only harms some of the families hardest hit by the recession but also weakens the economy by lowering overall demand.
- Virginia enacted a cut to its EITC that would raise taxes by $6 million on an estimated 114,000 low-income working families. (This cut might be reversed before it takes effect.)
- Minnesota cut back a renters' credit affecting 300,000 low- and moderate-income households and eliminated a gas tax credit.
- Georgia is considering eliminating $22 million in wage support for 1 million workers earning less than $20,000 per year.
Similar measures have been proposed in New Jersey, the District of Columbia, and Montgomery County, Maryland.
States have other budget-balancing strategies that are better for both vulnerable families and the state economies.
View the full report:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3172
http://www.cbpp.org/files/4-29-10sfp.pdf 5pp.
The Impact Of State Income Taxes On Low-Income Families In 2009
With State-by-State Data
By Phil Oliff and Ashali Singham
"In 13 of the 42 states that levy income taxes, two-parent families of four with incomes below the federal poverty line ($21,947) are liable for income tax…. Taxing the incomes of working-poor families runs counter to the efforts of policymakers across the political spectrum to help families work their way out of poverty."
View the full report:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3173
http://www.cbpp.org/files/4-29-10sfp2.pdf 20pp.
Related Press Release:
State Income Taxes Push Many Working-Poor Families Deeper Into Poverty
Some States Considering Scaling Back Tax Credits For Low-Income Working Families
http://www.cbpp.org/cms/index.cfm?da=view&id=3174http://www.cbpp.org/files/4-29-10sfp-pr.pdf
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