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State Income Taxes Pushing Many Working-Poor Families Deeper Into Poverty |
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Center on Budget and Policy Priorities: In nearly half of the states with an income tax, a family of four owes the tax even if its income falls below the poverty line, according to a new report from the Center on Budget and Policy Priorities. In 19 of the 42 states that levy an income tax, the 'tax threshold' (the income level at which families begin owing taxes) for a two-parent family of four for tax year 2006 is below $20,615, the poverty line for such a family. The number of states that tax poor families of four was unchanged from 2005, as improvements in some states were offset by backsliding in others. (Since 1991, the number of states that tax poor families of four has declined from 24 to 19.) But some improvements are expected in the near future, the report notes. Several states with very low tax thresholds have recently enacted changes that should save low-income families hundreds of dollars in taxes over the next three years.
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