114 posts categorized "Tax Credits"
Photo by Flickr user nicolasnova
Budget negotiations to avoid the "fiscal cliff" are now underway. The president and Congress are working intensely toward a deal — so pressure to cut federal spending, particularly to programs for hungry and poor people, has never been higher.
For the next six weeks, every Washington interest group will be pounding the halls of Congress to weigh in on a multi-trillion dollar deal that will affect every federal program and every person in this country for decades to come. Unfortunately, the media and politicians are not talking about the tremendous impact that the deal will have on hungry and poor people. If we don’t speak up, vulnerable people could easily be forgotten.
Congress needs to hear your voice! We need your help to remind Congress to take the deficit seriously without balancing the budget on the backs of hungry and poor people. Proverbs calls us to speak for those without a voice. We must remind Congress that their budget decisions are moral choices that could have devastating consequences.
Call your U.S. senators and your U.S. representative today! Use our toll-free number (1-800-826-3688) and tell them to pass a budget deal that includes a circle of protection around programs for hungry and poor people in the United States and around the world.
Explain that any deal must
- Explicitly protect low-income entitlement programs for hungry and poor people—like SNAP (formerly food stamps), the Earned Income Tax Credit, and the Child Tax Credit—against cuts or harmful changes.
- Include additional tax revenue, balanced with responsible spending cuts, so that our country can reduce its deficits while continuing its commitment to reducing hunger and poverty in the United States and around the world.
- Prevent further cuts to non-defense discretionary programs, including poverty-focused development assistance, international food aid, and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).
Congress must reach a deal, but it is critical that Congress get it right. An imbalanced package will severely hamper our ability to address hunger and poverty for years to come. Call Congress today. If we wait, it will be too late.
Grace and Peace,
Bread for the World
At Bread, we are thankful for the many ways in which our country comes together on Thanksgiving. Charitable giving, food drives, holiday meals at soup kitchens, and the like allow the vast majority of Americans to participate in this celebration of harvest and thanksgiving.
Tomorrow, many families will also put food on their tables with the help of federal programs, such as SNAP (Supplemental Poverty Nutrition Assistance, formerly known as food stamps). When the holiday season ends, and charitable giving decreases as we return to the busyness of our lives, those programs will continue to provide vital assistance to those in need.
And, according to the U.S. Census Bureau's Supplemental Poverty Measure (SPM), released earlier this month, these programs are more crucial than ever.
The SPM is an attempt by the Census Bureau to measure poverty in a way that accounts for the ways in which our lives have changed over the last several decades. The “official” poverty measure was developed in the early 1960s, and though this measure is adjusted annually for inflation, it has more or less remained the same since it was created.
The SPM takes into account the following considerations that the Official Poverty Measure does not include:
- Government policies that alter the resources available to families—payroll taxes which reduce net income but also income-supports which ameliorate the impacts of poverty, such as tax credits and SNAP benefits (food stamps).
- Expenses that are necessary in holding a job, such as transportation and childcare
- Medical costs
- Variations in household units and support, such as child support payments, co-habitation, and multiple family households
- Geographic differences in the cost-of-living across the country
Here’s how the numbers from the SPM stack up against the official poverty measure:
According to the SPM, 16.1 percent of the U.S. population (49.7 million people) lived in poverty in 2011; data from the official poverty measure were 15.1 percent of the population (46.6 million people). In other words, 3.1 million more people lived in poverty, according to the SPM than the older official poverty measure.
- Fewer children lived in poverty in 2011, according to the SPM, as compared to official poverty data: 18.1 percent of children (13.4 million total) under 18, as measured by the SPM; 22.3 percent (16.5 million total children) by the official measure.
- Slightly more adults (ages 18-64) lived in poverty in 2011, according to the SPM: 15.5 percent (30.0 million total) by the SPM; 13.7 percent (26.5 million total) by the official measure.
- More older Americans lived in poverty in 2011, according to the SPM: 15.1 percent of adults 65 and above (6.2 million total) by the SPM; 8.7 percent (3.6 million total) for the official measure.
The SPM also helps measure the efficacy of anti-poverty programs. Among the findings:
- Without refundable tax credits, such as the earned income tax credit, child poverty would rise from 18.1 percent to 24.4 percent
- Without SNAP, the overall poverty rate would increase from 16.1 percent to 17.6 percent.
During the holidays, our country does an admirable job of remembering those in need, but direct assistance alone can't lift families out of poverty. As the SPM data shows, anti-poverty programs help the millions of families and children who are at risk of hunger—not only during the holiday season, but year-round.
Kyle Dechant is a fellow in Bread for the World's government relations department.
By Christine Melendez Ashley and Faustine Wabwire
Bread for the World’s efforts to create a circle of protection and push Congress to
reduce our deficits in a responsible manner are critical to ensuring
vulnerable people affected by natural disasters at home and abroad have
the support they need. These programs continue to be at risk as Congress
works to craft a farm bill and a deficit reduction package.
In the past year, Bread has worked to protect and strengthen domestic nutrition programs, such as the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps) and child nutrition programs. These programs have provided quick and substantial help to New York, New Jersey, and other affected states in the wake of Hurricane Sandy. For example:
- The U.S. Department of Agriculture (USDA) rushed emergency food to affected areas for distribution through food banks and emergency food channels.
- USDA has authorized 13 affected states to issue replacement SNAP benefits for food purchased and lost in the month of October. They also authorized an extra two weeks of benefits for everyone on SNAP in and around New York City—a benefit totaling $65 million.
- Some of the worst affected states have also been authorized to allow SNAP recipients to purchase hot, ready-to-eat foods. This is not allowed under normal SNAP rules.
- USDA approved free school lunches for all children in New York public school districts for the month of November.
Bread has also been a strong advocate for effective foreign assistance programs and international food aid. In the last several years, Bread has pushed for robust funding of these programs. Hurricane relief efforts abroad are being carried out through foreign assistance programs at USAID. For example:
- USAID has provided 50 metric tons of food aid to Haiti to help address food insecurity concerns.
- USAID has distributed plastic sheeting to help approximately 10,000 people, family hygiene kits have helped nearly 12,500 people, and an estimated 6,400 blankets.
- USAID has also provided items such as wheelbarrows and tools helpful for clean-up to displacement camps most affected by Hurricane Sandy.
In the last two years, Congress has introduced proposals to decimate these programs. Despite these threats, Bread has pushed back and prevented these proposals from becoming law, thus enabling these programs to respond quickly and effectively to dramatic need. As Congress works to avoid the “fiscal cliff” and negotiate a budget deal, we must continue to push for a circle of protection around programs that effectively serve the most vulnerable in the United States and around the world.
Christine Melendez Ashley is a policy analyst in Bread for the World's government relations department.
Faustine Wabwire is Bread for the World Institute's foreign assistance policy analyst.
Sen. Mike Johanns (R-Neb.) listens as Bread for the World activist Jana Prescott speaks during Bread for the World Lobby Day in Washington, D.C., on Tuesday, June 12, 2012. (Laura Elizabeth Pohl/Bread for the World)
By Zach Schmidt
On Halloween, dozens of men and women in the Cornhusker State wore powerful costumes. While indistinguishable from ordinary citizens on the outside, on the inside their hearts beat for hungry and poor people. They were wearing costumes that don’t come off—their advocate costumes.
This group of advocates seeks justice to pour down like a waterfall. They join their voices in calling for protection for their most vulnerable neighbors—those in their communities, their country, and their world. On Oct. 31 they joined their voices in calling the congressional office of Sen. Mike Johanns (R-Neb.).
Through the work of a handful of leaders, more Bread for the World phone calls were made to Sen. Johanns on Oct. 31 than on any other previous call-in day! We set a sizeable goal of 50 calls, but exceeded expectations! A total of 67 phone calls were placed asking Sen. Johanns to protect domestic and international food security programs, including SNAP and WIC in the United States, and development assistance and food aid abroad.
Sen. Johanns is a member of the “Gang of Eight,” a bipartisan group of senators working on a framework to address the federal budget deficit and avert the “fiscal cliff.” The term fiscal cliff is being used to describe the combination of $1.2 trillion in across-the-board cuts and the expiration of the 2001 and 2003 tax cuts, beginning in January.
Everything is on the table for this group of senators, and they’re working hard to come to agreement. They want to be able to unveil a proposal very soon, which is why we took action when we did. We made dozens of phone calls to the senator’s Washington office telling him that Congress cannot balance the budget on the backs of poor and hungry people.
The feedback that organizers heard from callers was that the senator’s staffers were friendly and receptive to listening to them and noting their concerns. For this, we'd like to thank the senator and his staff. And most of all, we'd like to thank those who made phone calls to protect hungry and poor people—especially those who not only made calls themselves, but got others to do so, too!
Zach Schmidt is a Bread for the World regional organizer in the Central Hub, which includes Illinois, Kansas, Missouri, and Nebraska.
Bread for the World regional organizer Zachary Schmidt (far left) meeting with Chicago pastors and community leaders to organize a call-in day targeting Sen. Dick Durbin. (Photo courtesy of David Swanson).
By Zach Schmidt
Congressional offices in Washington, D.C., shut down on Tuesday, Oct. 30, due to Hurricane Sandy, but that didn't stop hunger advocates in Illinois from pulling off a successful call-in day targeting Sen. Dick Durbin (D-Ill.).
With our thoughts and prayers with those who lost loved ones to the ravages of Sandy, Illinoisans worked doubly hard to preserve the circle of protection that helps so many, both at home and abroad. Many activists placed not one, but two calls that day, making the effort to reach Sen. Durbin's district office in Chicago—which was open and operating last week—after learning that his D.C. office was closed.
Those who follow Bread for the World's issues may wonder why we focused energy on Sen. Durbin, one of the strongest champions for hungry and poor people in Congress. The answer is simple: to encourage him to “keep it up” in these turbulent times. When it comes to finding a way forward for our nation, everything is on the table, from spending cuts (including cuts to vital safety net programs) to tax increases. On Capitol Hill, there is great pressure to come to a budget agreement—any agreement—especially for Sen. Durbin, who is in a position of leadership. But we in Illinois say, “not on the backs of our most vulnerable neighbors.”
We Illinoisans say, “Senator Durbin, thank you for protecting poor and hungry people. As a leader in the Senate and with the 'Gang of Eight,' the bipartisan group of senators working on a framework that will address our nation’s deficit. Continue to push your colleagues to protect programs such as SNAP, WIC, and tax credits in the U.S., and poverty-focused assistance abroad. We support you as you do this.”The successful call-in day started as a distant idea that steadily built momentum and force through the joint effort of Bread members and faith and community leaders. Bread's regional organizing team got to know community leaders and pastors on Chicago’s South Side and in the city’s western suburbs. These leaders know that the church is called to serve the broken both by meeting their needs and by advocating for them. They shared stories of people in need, and those stories motivated us and moved us forward together.
(Source: The Washington Post)
By Kyle Dechant
Last Friday, the U.S. Bureau of Labor Statistics revealed that the national unemployment rate fell below 8 percent for the first time in more than 43 months. To the relief of many policy makers, September’s seasonally adjusted rate came in at 7.8 percent.
Why We Care at Bread
(Sources: U.S. Bureau of Labor Statistics, U.S. Census Bureau)
Poverty in its most basic form is a measurement of income. As such, it’s not surprising to find that as unemployment falls in the United States the rate of poverty also decreases. The graph above charts U.S. unemployment and poverty over the past 31 years and shows how, generally speaking, unemployment and poverty tend to rise and fall together.
An unemployment rate of 7.8 percent is high by any historic measure. However, given that unemployment has been above 8 percent for almost four years and that the unemployment rate has historically been an accurate barometer of longer-term trends in poverty, this drop seems to indicate that poverty may decrease by more in the near future.
By Robin Stephenson
The first presidential candidate debate will be held tomorrow, Wednesday, October 3, at 9 p.m. ET, and will focus on domestic policy. The debate provides an opportunity to put domestic hunger and poverty in the spotlight, and social media can be used to drive the conversation. Fifteen percent of Americans—including one in five children—lived in poverty in 2011. It is critical that our political leaders address the most vulnerable members of our population, and with enough grassroots urging, they will.
At Bread for the World, we have created a debate Bingo Game, which can be downloaded and printed out. Each bingo card square contains a word or phrase associated with an issue that Bread members care about: "farm bill," "SNAP/food stamps," and "Earned Income Tax Credit," for example. As you watch the debates with friends and family, mark off a square every time either President Barack Obama or Governor Mitt Romney uses one of the words. Use the game as a tool to track how the candidates are addressing programs and policies most vital to poor and hungry people.Another way to amplify the message that poverty matters is to use social media channels. This month, Bread (along with many of our partner organizations) is encouraging its members to participate in the #talkpoverty campaign led by Half in Ten.
Do you have a question you'd like debate moderator Jim Lehrer of NewsHour to pose to the candidates? Tweet it to @newshour and use the hashtag #talkpoverty. Here are a couple of sample tweets:
My Presidential debate question @NewsHour: Will you support extending tax credits for working families? http://ow.ly/e4zj0 #talkpoverty
.@NewsHour Ask Candidates: Will you protect SNAP (food stamps), the most direct way to reduce hunger? #talkpoverty http://ow.ly/e9FVu
You can also create tweets using the facts on our Offering of Letters web pages on tax credits and domestic nutrition. If you are holding a debate house party, playing Bingo, or tweeting, take photos of the action and post them to your Facebook page or tweet it. Be sure to tag us!
Poor people cannot be forgotten during this election season, and it will take a loud chorus of anti-hunger voices to make sure the issues of hunger and poverty receive attention.
Robin Stephenson is social media lead/senior regional organizer, western hub.
Photo: John, a former banker who is one of the subjects of The Line, shops for himself and his three children at a food bank. (Film still from The Line)
By Sarah Godfrey
When Emmy-winning filmmaker Linda Midgett set out to find subjects for The Line, her short film documenting what it means to live at, or below, the poverty line in America, she had no trouble finding people dealing firsthand with hunger and poverty. What was difficult, Midgett says, was finding subjects willing to talk about those difficulties in front of her camera.
"I think it’s easy to find people who are struggling in these ways, but I think what was the bigger challenge was finding people willing to share their struggles publicly," she says. "I talked to food pantries, to various organizations, I talked to the Salvation Army. A lot of people I reached out to were not willing to go on camera.
"I don’t say that as a criticism," she continues. "But, for me, it highlighted how much shame is associated with being in poverty."
The Line goes a long way toward addressing the shame and the stereotypes that often surround poverty. The film tracks four subjects: John, who lives in the suburbs of Chicago and, after losing his six-figure job in the banking industry, finds himself dependent on food banks to feed his family; Sheila, a Chicago resident who grew up in poverty, escaped its clutches, and finds herself again facing financial difficulty after a debilitating accident; James, who moves from New York City to North Carolina in search of work, and still barely scrapes by, despite working long, hard hours; and Ronald, a Gulf Coast shrimper whose livelihood has been affected by both Hurricane Katrina and the BP oil spill.The Line was funded by a partnership of organizations, including Sojourners, World Vision, and Bread for the World. The film premieres tonight, at church viewings around the country, at 8 p.m., eastern time.
One of the things that separates The Line from other films tackling issues of hunger and poverty in America is the fact that Midgett allows the subjects to tell their stories themselves, without interference.
"I felt like one of the most important things I was trying to do with this film was to break down stereotypes of who poor people are, what they look like, what they sound like, and the best way to do that was just to let them talk," Midgett says. "As individuals, they're all so compelling, and have such unique perspectives, just the process of listening to them, in and of itself, breaks down stereotypes," Midgett continues. "Instead of thinking of 'poor people,' it becomes, 'oh, that’s Sheila, that’s John.' The more you know people by name, and know they're human beings, not statistics, the more it changes your heart."
Midgett says she was surprised by what a diverse cross-section of society her subjects represent—one of the most surprising things she learned while working on the film was that the rate of poverty in the suburbs is on the rise.
"I was not personally familiar with that info, so when I came across that, I said, 'whoa.' To see food pantries in these formerly strong middle-to-upper class neighborhoods, that really was shocking," she says. "The first [subject] in the film, John, he was a former president of a bank, and when the banking industry imploded, he got caught in that, and decided to make a career change to become a schoolteacher. His mom was a teacher, his grandmother—it was a noble profession and he felt drawn to it, but he wasn't able to find a full-time teaching job.
"He's in DuPage County, Illinois, one of wealthiest counties in the country—definitely in the Midwest—and he's feeding his three children with food from food pantries, living off of $12,000 per year. That was crazy for me—I went to Wheaton College in DuPage County, I know DuPage County as this very, very affluent community, and now the poverty rate there has skyrocketed, and all sorts of people are in [John's] position now."
Midgett hopes that, after the film's premiere tonight, communities will continue to share it, hold screenings at churches, and use it as a tool to discuss poverty going into the November elections and beyond. "The plan is to keep getting it out there, keep making it available to people, and hopefully people find it valuable and inspirational enough to keep sharing it," Midgett says.
The Line premieres at 8 p.m. ET tonight, at various church viewing parties scheduled around the country. Find one close to you here. If you'd like to host a screening after tonight, consider holding an adult forum and discussing the film along with the Circle of Protection presidential candidate videos. Contact your regional organizer for more information.
Sarah Godfrey is Bread for the World's associate online editor.
The House and Senate are both on recess until after the November 6 elections. They are expected to return to Washington as early as November 13. For information on communicating with your members of Congress during this campaign season, contact your regional organizer or use our online election resources.
Election season is in full swing. While members of Congress finalized a stop-gap spending bill that will fund federal programs through March of next year, they put off acting on other pieces of legislation, including the farm bill. After November, members of Congress will make difficult decisions about deficit reduction, particularly the $1.2 trillion in across-the-board cuts scheduled to take effect in January and the expiration of the 2001 and 2003 tax cuts. Bread members must continue to push for a proposal that safeguards programs that help vulnerable people in the United States and abroad.
This week, the Senate passed a six-month continuing resolution (CR, temporarily funding government operations until a budget is passed) to fund federal discretionary programs at roughly current levels, plus a 0.6 percent increase for the first part of the 2013 fiscal year. The CR also included a clean six-month extension of Temporary Assistance for Needy Families (TANF). The negotiated CR does not alter the path of scheduled across-the-board spending cuts, or sequestration, which is still scheduled to go into effect January 2. The House passed the CR last week.
The House and Senate left Washington without taking action on the farm bill—a bill governing federal farm and food policy. The current farm bill is set to expire on September 30, 2012. This legislation governs domestic nutrition programs, including the Supplemental Nutrition Assistance Program (SNAP, formerly food stamps), and international food aid programs that are vital to hungry and poor people. Leadership in both chambers have indicated that they will take action on the farm bill after the elections, during the lame duck session of Congress. The Senate continues to push for a full five-year reauthorization of the farm bill while the House is open to a temporary extension with the full bill being resolved next year. How leaders decide to move forward will be informed by the outcome of November elections.
While farm programs technically expire on September 30, harmful administrative changes (like federal farm commodity price supports reverting to 1949 law) will not go into effect right away. The 2008 farm bill covers all of 2012’s calendar year crops, allowing some wiggle room for Congress to decide how to move forward. Additionally, provisions included in the continuing resolution secure SNAP funding through next year. The last time the farm bill was allowed to expire was in 2007, when the bill expired on September and an extension was not passed until December 26.
The bipartisan group of Senators called the Gang of Eight continues its work to develop a comprehensive, bipartisan package that would replace the sequester and expiring tax cuts with a framework for deficit reduction, including additional tax revenues and further spending cuts. While producing a deal laying out the specifics of what programs to cut and what taxes to raise is unrealistic for the lame duck session, the proposal could establish a process for committees to find the specific savings. If successful in reaching a deal that Congress enacts, the Gang of Eight proposal could determine the available funding for programs for hungry and poor people for the next 10 years. Those involved in the Gang of Eight include Senators Warner (D-VA), Durbin (D-IL) , Conrad (D-ND), Bennet (D-CO), Chambliss (R-GA), Crapo (R-ID), Coburn (R-OK), and Johanns (R-NE).
More than 80 members have cosponsored House Resolution 760, which rejects the cuts to SNAP included in the proposed House farm bill (H.R. 6083). The resolution is non-binding, but it is an opportunity for members of Congress to show strong support for protecting SNAP by cosponsoring the resolution. We are encouraging Bread members to ask their representatives to cosponsor. A full list of cosponsors can be found online.
On Friday afternoon, Republican Study Committee Chairman Jim Jordan (R-OH), along with Reps. Paul Broun (R-GA), Steve Chabot (R-OH), and Tim Huelskamp (R-KS), introduced a proposal to block-grant farm bill nutrition programs. Under this plan, SNAP, the Emergency Food Assistance Program, Community Food Projects, Commodity Supplemental Food Program, Senior Farmers Market Nutrition Program, and the Fresh Fruit and Vegetable Program would be consolidated into a single block grant to the states, with funding returned to FY2008 levels. Members argue this proposal will streamline programs and give states more flexibility while cutting spending. Like other SNAP block grant proposals introduced this Congress, this proposal will not likely become law, despite possible attempts to attach it to a moving farm bill in the lame duck session. For more information on why block-granting SNAP would be harmful, please see our Block Grants 101 fact sheet.
Special Supplemental Nutrition Program for Women, Infants and Children (WIC) is facing potentially devastating cuts. Although the continuing resolution extends funding through March at levels agreed to last August in the Budget Control Act , WIC is subject to approximately 8.2 percent in automatic cuts on January 2 if Congress fails to come up with a deficit-reduction plan to replace the sequester. These cuts could mean a loss of benefits for more than 700,000 low-income women and young children.
Poverty-focused foreign aid makes up a small part of total discretionary funding, which must be approved by Congress each year in the appropriations process. The continuing resolution funds programs at the Senate levels for FY 2013. PFFA is subject to cuts in January when sequestration is enacted. The programs would take an 8.2 percent cut, according to the OMB report. These cuts could mean lives lost around the world. For example, as a result of the sequester:
- 276,500 fewer people would receive HIV/AIDS treatment, potentially leading to 63,000 more AIDS-related deaths and 124,000 more children being orphaned.
- 656,000 fewer children annually will have access to quality primary school education, making their road to overcoming poverty that much harder.
Earlier in the week, Senator Rand Paul (R-KY) submitted a proposal to cut off aid to several countries, including Pakistan, Libya, and Egypt. The Paul amendment failed by a vote of 10-81.
The Foreign Assistance Transparency and Accountability Act (S. 3310), introduced by Senator Lugar, with support from Senator Rubio, was passed by the Senate Foreign Relations Committee on September 19. The objective of this bill is to improve transparency and accountability within U.S. foreign aid by instituting a standard monitoring and evaluation requirement across all agencies that administer U.S. foreign assistance. Additionally, it calls for information garnered from the evaluations to be made public. The companion legislation is the Poe-Berman bill in the House. Our hope is that both bills will be taken up by the full House and Senate during the lame duck session.
The 2001 and 2003 tax cuts expire at the end of this year, and Congress is in the midst of debating which parts to extend, including the Earned Income Tax Credit (EITC) and the Child Tax Credit.
We expect the tax credits to be an important issue in the lame duck session, along with the rest of the tax cuts. The bipartisan Gang of Eight senators are also looking at the tax credits as part of the tax cuts and possibilities for tax reform.
Food aid is reauthorized in the farm bill process and funded in the appropriations process. Like other discretionary programs, funding is extended at Senate levels for the FY2013 budget as part of the continuing resolution. Food aid is still subject to sequester and may be cut by 8.2 percent, which would result in over 3 million people losing access to vital food assistance and 377,200 fewer children having access to quality primary school education.
By Sarah Godfrey
The now-famous video that shows presidential candidate Mitt Romney talking about “the 47 percent” of Americans who “pay no income tax” has the entire country discussing who does or does not pay taxes. Romney’s remarks have thrust into the spotlight a study that is actually a smart, common-sense analysis of taxation—it shows that everyone, especially the poor, pays.
The "47 percent" figure is taken from a Tax Policy Institute study that found 46.4 percent of Americans did not pay federal income tax in 2011, but even the Institute itself has said its findings have been largely misconstrued. “Commentators have often misinterpreted that percentage as indicating that nearly half of Americans pay no taxes. In fact, however, many of those who don’t pay income tax do pay other taxes—federal payroll and excise taxes as well as state and local income, sales, and property taxes,” the group wrote in a 2011 explanation of its findings.
Derek Thompson, writing in the Atlantic on Sept. 18, put it plainly: “When you hear ‘the 47 percent,' you should think old retired folks and poor working families.” The Washington Post’s Wonk Blog analyzed the same Tax Policy Institute study, and found that of the roughly 47 percent of those who don’t pay income tax, 60 percent are still paying into Social Security and Medicare. Another 22 percent of non-payers are retirees. “Only about 7.9 percent of households are not paying any federal taxes at all,” wrote Brad Plumer. “That’s usually because they’re either unemployed or on disability or students or are very poor.”
And the poor actually often shoulder a greater share of the tax burden relative to their income. A 2012 Citizens for Tax Justice study found that the poorest fifth of Americans, a group with an average cash income of $13,000 per year, saw 17.4 percent of their incomes go to taxes last year.
This is because while income tax is progressive, sales and excise taxes are regressive. A progressive tax increases proportionally as the income of an individual taxpayer rises. However, fixed-rate regressive taxes represent a greater portion of one’s income as that income falls. If you live in Washington state, for example, you pay 6.5 percent sales tax on a tube of toothpaste whether you earn $11 million per year or $11,000 per year. The poor sacrifice a much greater percentage of their earnings to regressive taxes.
And the poor are often less able to escape taxes. To give a basic example, groceries and unprepared foods are typically exempt from sales tax, but in food deserts—poor neighborhoods where it’s hard to find a supermarket, but easy to find fast food restaurants—the residents are unfairly burdened by sales tax when it comes to purchasing food and other necessities.
The non-partisan Institute on Taxation and Economic Policy’s 2009 study “Who Pays?” offers a good primer on how regressive taxation affects the poor. The study assessed the fairness of each state’s tax system, measuring state and local taxes paid by different income groups in 2007. The main finding of the research was that “nearly every state and local tax system takes a much greater share of income from middle- and low-income families than from the wealthy.”
The ten states with the most regressive tax systems asked their poorest residents — those in the bottom 20 percent of the income scale — to pay up to six times as much of their income in taxes as they ask the wealthy to pay.
Tax credits, such as the Earned Income Tax Credit and the Child Tax Credit have helped low-income working families during the recession and assist in offsetting the regressive tax burden shouldered by the poor. These tax credits, which were established with bipartisan support, will expire at the end of the year. Congress is currently debating if these credits will be extended.
Federal income tax is just a sliver of the taxes that are paid in this country, so not paying federal income taxes is not akin to not paying taxes. The old adage that the only certainties in life are death and taxes holds true – for everyone. Unfortunately, the reality of how the tax burden is shared is not always understood.
Sarah Godfrey is Bread for the World's associate editor, online.
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