Poor Pay Biggest Share of State, Local Taxes

by Michelle Chen, NewStandard
http://newstandardnews.net/content/index.cfm/items/2879

Antipoverty activists say that America's poor, saddled with a disproportionally high state and local tax burden, are getting hit from both sides on all levels of government.

Mar. 1 – Federal program cuts, tax breaks for the wealthy and state budget crises are not the only forces squeezing the working poor. According to a study by a progressive think tank, low-income households are getting pinched yet again by state income-tax policies that turn what little they have into even less.

Of the 42 states levying income taxes in 2005, nineteen taxed two-parent families of four living in poverty, and sixteen taxed impoverished single-parent families of three, according to the Center on Budget and Policy Priorities (CBPP), which has tracked state income-tax data since the early 1990s.

Antipoverty groups say such tax policies add a perverse twist to an already tattered social safety net, and are demanding tax relief for the poor through redistributive fiscal policies.

"This is an especially harsh time to be taxing families deeper into poverty," said Kimble Forrister, executive director of the low-income advocacy coalition Alabama Arise, noting that families in his state are still reeling from the impacts of Hurricane Katrina and skyrocketing fuel costs.

According to the CBPP, while some states have recently reformed their tax codes to relieve the lower income brackets, others have simply let their income-tax thresholds stagnate. This has allowed inflation to drive the tax floor below the federal poverty line – about $16,600 for a family of three in the lower 48 states and the District of Columbia. The study also found that 31 states taxed families with incomes just above the official poverty line, pulling them back toward financial insecurity.

In Alabama, the basic tax exemptions are essentially held over from Depression-era statutes. In 2005, the state culled income taxes from families of four earning as little as $4,600. A single-parent family of three making the minimum wage – that's under $11,000 per year – paid nearly $220. The state charged four-person families with two parents living at the poverty line, which hovers just below $20,000, about $540.

Angela, a 30-year-old single mother in Auburn County, sees income taxes are just one more hurdle in her struggle to keep her two children, ages 9 and 12, housed and fed.

"It's just hard from day to day," she said. In her view, the government seems to be discouraging her efforts toward economic self-sufficiency. The more she works –stringing together low-skill, temporary jobs paying as little as $6.10 an hour – the less she receives in food-stamps assistance, and the closer she moves toward the income threshold at which the government saps her earnings.

"It's just kinda messed up," she said. "If you go out and get a job, you're still hurting yourself, 'cause now, I gotta worry about feeding my family out of my pocket."

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