An Increased EITC for Childless Adults Would Reduce Poverty and Enjoys Bipartisan Support
Income inequality has been on the minds of many voters during the presidential primaries. If you think it’s only a concern of Democrats, take a look at the results of the most recent “Wisconsin Survey” – a St. Norbert’s poll conducted for Wisconsin Public Radio and Wisconsin Public Television. The survey last week of 616 registered Wisconsin voters found that 66% favor “increasing taxes on wealthy Americans and large corporations in order to help reduce income inequality in the U.S.,” compared to only 28% who said they were opposed.
There are lots of different ways to adjust taxes (and labor policy) to reduce income inequality. Unfortunately, most of those – such as closing corporate tax loopholes and increasing the minimum wage – have little chance in Congress right now. But one promising policy option that does have a chance is to provide a significant increase in the Earned Income Tax Credit (EITC) for adults who don’t have dependent children. Read more
President Obama’s Budget Would Make Expansion an Even Better Deal
The budget bill introduced this week by President Obama would make the expansion of Medicaid an even better deal for states like Wisconsin that have not yet taken up the option. If Wisconsin expanded BadgerCare eligibility in January 2017, the president’s recommendations would increase the savings for Wisconsin taxpayers by $252 million by the end of fiscal year 2021.
The president’s proposal calls for reimbursing each state for the full cost of newly-eligible adults for the first three years after expanding coverage, regardless of when the expansion begins. As a result, states that expand coverage of adults this year or any time in the future would get the same enhanced federal funding as the states that expanded coverage in 2014. Read more
Lawmakers Considering Proposals that would Hinder Wisconsin’s Ability to Make Investments in State’s Future
State lawmakers are considering a number of bills and constitutional changes that would make it difficult for Wisconsin to make necessary investments in local schools, communities, and health care systems. Several of the proposals are aimed at changing the budget process in ways that would make it more difficult for elected officials to boost the economy, lessen the economic effects of recessions, and protect vulnerable residents.
Wisconsin lawmakers are considering the following proposals:
More corporate tax cuts (Assembly Bill 623/Senate Bill 503) This bill contains a variety of innocuous-seeming changes to corporate tax law, but there is nothing innocuous about the cost of this proposal, which could be as much as a whopping $384 million a year! Keep in mind that this bill comes in the wake of a recent tax cut that gives manufacturers and agricultural producers a virtual pass on paying any corporate income tax at all.
At the hearing held by the state Senate on January 13, the bill author indicated he was open to changes that would pare back the cost. Read more
Wisconsin families all across the state will have a harder time making ends meet if Congress does not take action to protect improvements to two important federal tax credits, according to a new analysis from the Wisconsin Budget Project.
More than 150,000 working families in Wisconsin and 301,000 children will be harmed if federal policymakers fail to save key provisions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) that are set to expire at the end of 2017. These families will lose an average of $1,100 per year they could use to make investments that help them keep working and improve the economic security of their family, such as paying for car repairs or saving for their children’s college educations.
Lawmakers have an opportunity in the next few weeks to make the improvements permanent. Several temporary corporate tax provisions are expiring soon, and advocates for working families believe that if the businesses tax breaks are made permanent, improvements to tax credits for struggling working families should also be made permanent in the same legislation. Read more
Pro-work tax credits give a boost to thousands of veteran and military households in Wisconsin, but nearly half of those families will lose part or all of their tax credits unless Congress takes action.
Key provisions of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), both of which help families with low incomes make ends meet, are set to expire at the end of 2017. These federal credits encourage work, help children do better in school, improve the health of children and families, and strengthen the future workforce.
In Wisconsin, hundreds of thousands of households – including 36,000 veteran and military households – benefit from the EITC or the part of the CTC that benefits families with low incomes. However, 17,000 of the veteran and military families that benefit will lose part or all of their tax credits if Congress doesn’t act to protect improvements to those credits. Read more
Congress has a chance this fall to save key provisions of the federal Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), two proven pro-work strategies that help working families make ends meet and provide the basics for their children.
If Congress does not act, 158,000 Wisconsin families with 301,000 children will lose some or all of their working-family tax credits, according to a new analysis by the Wisconsin Budget Project.
There is an effort underway in Congress to make several temporary corporate tax provisions permanent, and the debate is expected to come to a head this fall. Some federal lawmakers have advocated for letting these corporate provisions leap-frog over tax credits for working families instead of putting top priority this fall on saving key provisions of the federal EITC and CTC. Something similar happened during the last major tax debate, when these EITC and CTC provisions were only extended through 2017 but estate tax changes for wealthy families were made permanent. Read more
This week is national Sunshine Week, which is a time to celebrate openness and transparency in government. That seems rather ironic after the House Budget Committee Chairman offered a plan for the federal budget that fails basic standards of transparency. As Robert Greenstein of the Center on Budget and Policy Priorities wrote on Wednesday:
“The plan proposes a whopping $1.1 trillion in essentially unspecified cuts in mandatory (i.e., entitlement) programs outside health care and Social Security, which reflects an exceptional if not unprecedented lack of transparency.” Read more
Holiday shoppers are increasingly turning to the internet to make their purchases, but Congress has yet to close a loophole that gives online only retailers an advantage over their bricks and mortar counterparts.
Currently, online retailers that do not have a physical presence in a particular state are not required to charge sales tax to residents of that state. That doesn’t mean that these purchases are tax free, though: purchasers are still legally required to pay the sales tax, by declaring it on their income tax form. Few do.
When online-only retailers do not charge consumers sales tax – even though sales tax is owed on the purchases – those retailers have a competitive advantage over other retailers that are required to collect sales tax.
Ideally, Congress would step in to level the playing field between different types of retailers, by passing legislation that would allow states to require all retailers to collect sales tax. Read more
Congress is on the verge of passing a tax cut plan that would prioritize tax breaks for corporations over middle-income and low-wage working parents, while significantly increasing the federal deficit. As the New York Times reported this morning, President Obama has threatened to veto the bill if it reaches him in its current form.
The bill in question is referred to as “tax extender” legislation, which comes up on a regular basis as the start of the next tax year approaches. In his On the Economy blog today, Jared Bernstein describes this annual process as follows:
“Tax extenders are a series of allegedly temporary tax breaks that are conventionally extended, unpaid for, year after year. These include tax credits for research and development, expensing deductions for small businesses, deductions for state and local sales taxes, and more. To put them in the annual budgets that Congress and the President construct each year would mean they’d either have to be paid for with higher taxes or spending cuts elsewhere or added to the deficit. Read more