In the wake of a Tax Policy Center report that some reporters took to mean that half of Americans were totally freeloading, a new report from the Center on Budget Policy and Priorities shows that, while many low-income families may not pay federal income taxes, 13 states make up the difference. In 2009, partly because of budget crises, 13 states taxed two-parent families of four with incomes below the poverty line, 11 states taxed single-parent families of three with incomes below the poverty line, and 25 states taxed families of four with income levels just above the poverty line.
These findings are based on the poverty line for 2009: $21,947 for a family of four and $17,102 for a family of three. While families below the poverty line don't pay state income tax in most states, they do pay other taxes such as sales, gas, excise, and property taxes.
Some states levy income tax on working families in severe poverty. For example, Alabama, Georgia, Illinois, Montana, and Ohio tax two-parent families of four earning less than three-quarters of the poverty line ($16,460).
In some states, poor families face several hundred dollars in income tax. In 2009, for example, a two-parent family of four with income at the poverty line owed $468 in Alabama, $266 in Hawaii, and $225 in Montana, according to the report.
The report also found that in recent years, efforts to help low-income families have faltered because states need to close budget gaps. But the myth that poor families are freeloaders who only have themselves to blame for their financial straits is a persistent one. And it probably doesn't help that middle-class families are being squeezed as well.
-- Monica Potts
