Thursday, December 29, 2011

The No Tax Increase Republican Party in our state just increased taxes on the poor.

As we contemplate doing out taxes again, this quick reminder: The earned income tax credit has been reduced, thus increasing taxes on those receiving it. It's that simple. 

But Republicans have found a way to magically claim that it’s not a tax increase. To them, its welfare, since any money they receive is not money they have earned. So it’s nothing like a tax increase on actual wages. 

No, it doesn’t explain away increasing taxes on the poor, but it does justify the broken pledge in a way that hits all their hot buttons.
PostCrescent: Wisconsin (was) among only a handful of states that will effectively raise taxes on their poorest residents in 2012, according to a recent study by the Center on Budget and Policy Priorities, a nonprofit think tank. Since 1989, Wisconsin has offered low-income families with children a so-called earned income tax credit, which offsets Social Security taxes and lowers poor families' tax liability.

Here’s how it went up:
The 2011-2013 state budget reduces the percentages for families with two or more children, which the state Legislative Fiscal Bureau considers a net tax increase.

Starting next year, low-income families with two children will be capped at 11 percent of the maximum federal credit, or $562, down from $716.

Families with three or more children will be limited to 34 percent, or $1,955, down from $2,473.

The Wisconsin Council on Children and Families estimates a two-parent family of four that earns $32,500 a year would see an $81 cut in their tax credit next year.

It’s a tax increase. 


  1. Every dollar you take from low income families is removed immediately from economic demand and is one of the factors in the great stagnation we are now experiencing. The fact that these funds are typically passed on to the rich as tax breaks only makes matters worse as it adds to the pile of money fueling financial speculation and the bubble economy.

    It's a lose lose for everyone.

  2. Meanwhile, the rich continue to receive some thirty billion dollars a year nationwide in similar tax breaks and credits -- all similarly "unearned."