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March 27, 2008Expanding the EIC in 2009 |
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Oregon Center for Public Policy: This tax season, Oregon will require a minimum wage worker who was employed full-time, year-round last year and supported one child to pay about $321 in state income taxes. By expanding the Earned Income Credit (EIC), Oregon can give a hand up to low-wage working families, rather than leaving them behind. Oregon's EIC ties for sixth smallest among 23 states (including the District of Columbia) with state EICs. At the same time, Oregon's income tax on poor families of four ranks fifth highest among states, and its income tax on near-poor families of four ranks third highest. Expanding Oregon's EIC from 6 percent of the federal credit to 18 percent would eliminate income taxes on a minimum wage worker with one child and would reduce income taxes paid by other low-wage working families. A single parent raising one child and earning the maximum state EIC would have had $342 more last year to cover the costs of necessities if Oregon's EIC had been 18 percent of the federal credit, instead of 6 percent. Increasing Oregon's EIC would bring Oregon's overall state and local tax system closer to one that is based on taxpayers' ability to pay. Adding insult to injury, while a family of four with poverty level income from work paid about $238 in income taxes last year, two-thirds of corporations operating in Oregon, including corporations with substantial profits, paid just $10 each.
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