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Poverty, inequality and taxes

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Explores the effects of Wisconsin state tax policies on income inequality.

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Poverty, inequality and taxes

  1. 1. The Collision between the War on Poverty and Recent Tax Policy Choices For the Grassroots Northshore webinar series January 23, 2014 Jon Peacock, project director (jpeacock@wccf.org) Wisconsin Budget Project Wisconsin Council on Children and Families
  2. 2. Housekeeping Participants are on mute to avoid feedback You will be able to ask questions later using the chat tool in the lower left corner of the screen. To use the tool, type your message and then use the return key to send it.
  3. 3. Agenda Trends in poverty and inequality, and the role of safety net programs The role of tax policy choices in exacerbating inequality What we can do 3
  4. 4. % Poverty Over Time: 1959-2010 Children and Seniors Sachs JD. The Price of Civilization. 2011, Random House, NY. Chapter 10, pp. 185-208
  5. 5. Two Measures of Poverty
  6. 6. Effectiveness of Safety Net Programs
  7. 7. Unequal Growth Since about 1980
  8. 8. Rising Income Inequality in WI
  9. 9. Tax Increases in the 2011-13 Budget for Low-income Households While cutting taxes for the wealthy, the 2011-13 budget raised taxes on low-income households by:  Cutting the state Earned Income Tax Credit (EITC), which is now worth $121 less for a single mom with two kids who makes $23,000 per year; and  Ending the practice of annually adjusting the formula for the Homestead tax credit for inflation – which means the credit will be about $170 less in 2015 than it was worth in 2011 for an elderly person with a Social Security income of about $15,000 per year (growing by an average of 2.5% per year).
  10. 10. Effects of the Income Tax Cuts in the 2013-15 Budget
  11. 11. Effects of the Income Tax Cuts in the 2013-15 Budget (cont.)
  12. 12. Effect of Increasing Sales Tax to Pay for Elimination of Income Tax
  13. 13. Takeaways Antipoverty programs do work, but they are underfunded, and have to work against an economic tide creating more poverty and inequality. The forces behind that opposing tide include a variety of public policy choices, including state-level tax policy decisions. We can make a difference by speaking out (e.g., letters to the editor, social media, contacting legislators)
  14. 14. Follow WCCF WCCF Website: www.wccf.org Facebook: https://www.facebook.com/wiskids Follow us on Twitter: https://twitter.com/wiskids Kids Count Data Center: http://datacenter.kidscount.org/ WCCF Blog: http://www.wiskids.blogspot.com/ Wisconsin Budget Project: http://www.wisconsinbudgetproject.org/ Budget Project blog: http://www.wisconsinbudgetproject.org/category/blog Jon Peacock (jpeacock@wccf.org) 555 West Washington Avenue, Suite 200 Madison WI 53703 608-284-0580 14
  15. 15. Upcoming Webinars Tune in for more webinars at this time each Thursday. For information about upcoming and past webinars, go to: www.grassrootsnorthshore.com This presentation will be posted there in a few days, and also at www.wisconsinbudgetproject.org

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