STATE INCOME TAX BURDENS ON LOW-INCOME FAMILIES IN
2001
by
Elizabeth McNichol, Daniel Tenny, and Robert Zahradnik
Summary
| PDF of this report State Contact List State Fact Sheets |
| If you cannot access the files through the links, right-click on the underlined text, click "Save Link As," download to your directory, and open the document in Adobe Acrobat Reader. |
Despite years of tax-cutting at the state level, poor families in many states still face a substantial burden as they file personal income taxes for the 2001 tax year. In nearly half of the states that levy income taxes — 19 out of 42 states — two-parent families of four with incomes below the federal poverty line continue to owe income tax. In 17 of those states, poor single-parent families of three also pay income taxes. In addition, about half of the 23 states that don't tax the poor still tax families with incomes just above the poverty line, even though such families typically have difficulty making ends meet.
In some states, families with poverty-level incomes face income tax bills of several hundred dollars. For instance, a two-parent family of four in Kentucky with income of $18,104 — the 2001 poverty line for a family that size — owes $596 in income tax, the highest tax on such a family in the country. A single-parent family of three in Kentucky with poverty-level income of $14,129 owes $361, second only to the tax on such a family levied in Alabama of $388. Such amounts can make a big difference to a struggling family. Other states levying tax of $200 or more on families with poverty-level incomes include Arkansas, Hawaii, Indiana, Michigan, Montana, Oklahoma, Oregon, Virginia, and West Virginia.
Taxing the incomes of working-poor families runs counter to the efforts by policymakers across the political spectrum to provide more assistance to families seeking to work their way out of poverty. Many states have reduced income taxes on the poor over the last decade, and a narrow majority of states now exempt poor families from the income tax. The federal government has exempted such families since the mid-1980s.
Eliminating all or most state income taxes on working families with poverty-level incomes gives a boost in take-home pay that helps offset higher child care and transportation costs that families incur as they strive to become economically self-sufficient. In other words, relieving state income tax burdens on poor families is making a meaningful contribution toward "making work pay." More than a dozen states go even further; they not only exempt poor families from income taxation, but also provide a tax rebate that can help such families make ends meet.
States that choose to reduce or eliminate tax burdens on low-income families employ a variety of mechanisms to do so. These mechanisms include state Earned Income Tax Credits and other low-income tax credits; no-tax floors; and personal exemptions and standard deductions that are adequate to shield poverty-level income from taxation.
Although many states have made progress in reducing taxes on poor families over the last decade, the advent of the recession appears to have slowed that progress. In 2001 for the first time since the early 1990s, the average state income tax threshold — the income level at which a family of four first begins to owe taxes — failed to increase relative to the poverty line. Progress in 2002 may be similarly modest as state fiscal difficulties preclude many new tax cuts, but two states — Utah and Oklahoma — already have enacted changes that will lift thresholds for some or all families above the poverty line in 2002. Moreover, if states' fiscal difficulties lead states to consider broad reform of their tax codes, additional states may consider raising income tax thresholds as a fundamental part of any such reform.
Many States Continue to Levy Substantial Income Taxes on Poor Families in 2001
Some 23 states have chosen to exempt poor families of three and four from the income tax. As recently as 1996, the majority of the states with income taxes levied income taxes on families of three or four with poverty-level incomes. Now the reverse is true: a majority of states exempt such families from their income taxes. And among those states that continue to tax the poor, many have reduced the burden of those taxes.
Despite this progress, 19 states continue to levy income tax on poor families of four; 17 states continue to levy income tax on poor families of three. Some of these states in the last five years substantially increased the income level at which income tax is first owed and thereby reduced taxes on the poor. Nonetheless, income taxes on the poor in many states remain quite high. Moreover, 30 of the 42 states with an income tax still tax near-poor families of four with incomes just 25 percent above the poverty line.
At a time when states are urging more families to make the transition from welfare to work, continued progress in relieving state income tax burdens is an integral part of that policy agenda. Eliminating all or most state income taxes on working families with poverty-level incomes results in a boost in take-home pay that helps offset higher child care and transportation costs that families incur as they strive to become economically self-sufficient. In other words, relieving state income tax burdens on poor families is making a meaningful contribution toward "making work pay."
This analysis assesses the impact of each state's income tax in 2001 on poor and near-poor families with children.(1) (Forty-two states, counting the District of Columbia as a state, levy income taxes.) One important measure of tax burdens on poor families is the income tax threshold — the point at which, as a family's income rises, it first begins to owe income tax. Tables 1a and 1b show the thresholds for a single parent with two children and for a married couple with two children, respectively.
Methodology This report takes into account income tax provisions that are broadly available to low-income families and that are not intended to offset some other tax. It does not take into account tax credits or deductions that benefit only families with certain expenses, nor does it take into account provisions that are intended explicitly to offset the burden of a tax other than the income tax. For instance, it does not include the impact of tax provisions that are available only to families with out-of-pocket child care expenses or specific housing costs, because not all families face such costs. It also does not take into account sales tax credits, property tax "circuitbreakers," and similar provisions, because this analysis does not attempt to gauge the burdens of those taxes — only of income taxes. Moreover, such provisions tend to be quite modest and in most cases do not affect greatly tax burdens on low-income families. |
- In 17 states, the threshold for a single-parent family of three is less than $14,129, the Census Bureau's official poverty line for a family of three in 2001. In the remaining 25 states with income taxes, the threshold is above the poverty line; in those states, poor families pay no income tax.
- In 19 states, the threshold for a two-parent family of four is below the poverty line for such a family of $18,104. In the remaining 23 states with income taxes, the threshold is above the poverty line.
- Two states, Alabama and Kentucky, impose income tax on very poor families, those with incomes less than one-half of the poverty line. Those states and eight others — Hawaii, Indiana, Michigan, Montana, Ohio, Oklahoma, Oregon and West Virginia — tax families of three with full-time minimum wage earnings.
- The state with the highest threshold is California, where the threshold is $36,800 for a family of three and $38,800 for a family of four — more than twice the poverty lines for families of those sizes and well above the threshold for any other state.
Taxes on Poor Families
Why Focus on the Income Tax When Other Taxes Often Are More Burdensome for Poor Families? In most states, poor families pay more in consumption taxes such as gasoline, sales, and other taxes than they do in income taxes. Property taxes and other taxes and fees also impose substantial burdens on poor families. Nonetheless, income tax burdens on poor families are significant for two primary reasons. First, it is administratively easier for states to target income tax relief to poor families than it is to provide sales or property tax relief to those families; the great majority of the low-income tax relief enacted in the last decade at the state level has been administered through the income tax. Second, policymakers are often concerned about the negative message that high taxes on earnings send to families trying to work their way out of poverty. States that rely heavily on income taxes for revenue still can exempt poor families from taxation. Of the 10 states that receive their largest share of state tax revenue from personal income taxes, six — Delaware, Maryland, Massachusetts, Minnesota, New York, and Wisconsin — exempt poor families of three or four from the income tax. |
Where states tax the wages of poor families, those tax burdens can equal up to several hundred dollars — a substantial amount for a struggling family. These amounts are shown in Tables 2a, 2b, 3a and 3b.
- The average 2001 tax bill for a family with income at the poverty line in the states with below-poverty thresholds is $149 for a family of three and $244 for a family of four. In 11 states, the tax bill for a poor family of four can exceed $200, and in one state — Kentucky — it can reach as high as $596.
- By contrast, a majority of states levy no tax until a family's income exceeds the poverty line.
- Eleven states go further. These states offer tax credits that provide refunds to families with no income tax liability. These credits act as a wage supplement and income support, helping support families' work efforts and reduce poverty. The amount of refund for families with income at the poverty line is as high as $1,213 for a family of three in Vermont and $1,402 for a family of four in Minnesota.
Taxes on Near-poor Families
Many families with earnings just above the poverty line continue to find it difficult to make ends meet. Federal and state governments recognize the challenges faced by families with incomes slightly above the poverty line and have set eligibility for some assistance programs, such as energy assistance, school lunch subsidies, and in many states health care subsidies, at 125 percent of the poverty line ($17,661 for a family of three, $22,630 for a family of four) or above.
A majority of states, however, continue to levy income tax on families with incomes at 125 percent of the poverty line. Some 30 states, for instance, tax the incomes of such families of four, with the tax bill exceeding $500 in eight states — Alabama, Arkansas, Hawaii, Indiana, Iowa, Kentucky, Oregon, and Virginia. Some 24 states tax the incomes of families of three with income at 125 percent of the poverty line. See tables 4a and 4b.
Little Improvement in Income Tax Thresholds Since Last Year
Comparing Income Tax Thresholds in Poor States with Those in Wealthier States Relieving income taxes on poor families can appear to be a greater challenge for states with low per-capita incomes and higher poverty rates than it is for wealthier states, because poorer states generally have more potential beneficiaries of such tax relief and a smaller overall tax base to absorb the loss of revenue. Yet both high-income states and low-income states have been able to exempt poor families from the income tax. In fact, of the 26 states that exempt from taxation the income of a single-parent family of three with income at or below the poverty line, 11 have per capita incomes below the U.S. median, including three of the nation's six poorest states: Idaho, New Mexico, and Mississippi. |
States made little progress in the 2001 tax year in reducing taxes on poor families.
- The number of states that tax families of four remains steady at 19.
- The average threshold among all states has changed little, and the average threshold among those states that tax the poor has actually fallen from 73 percent to 71 percent of the federal poverty line.
- The average tax levied in those 19 states on a family of four with poverty-level income rose, in inflation-adjusted terms, from $234 in 2000 to $244 in 2001 — an increase of about 4 percent.
This lack of progress is partially, but not entirely, due to the economic slowdown that began in early 2001. Although the slowdown dampened the ability of states to finance tax cuts in general, states still implemented some $1.3 billion in personal income tax cuts, including large tax cuts in several states that still tax the poor — Hawaii, Michigan, Oklahoma and Oregon. Among those tax cuts, only the new state Earned Income Tax Credit for working-poor families in Oklahoma for 2002 will substantially affect income tax thresholds; the others will not.
Most but Not All States Have Made Substantial Progress since the Early 1990s
Over the last decade, states generally have improved their tax treatment of working poor families. From 1991 to 2000, for example, the number of states levying income tax on poor families of four declined from 24 to 19. And among those remaining 19 states, many reduced taxes on poor families. From 1994 to 2001 the average income tax for a family of four at the poverty line fell by about 12 percent in inflation-adjusted terms, and the average threshold rose from about 60 percent of the federal poverty line to 73 percent. Tables 5 and 6 show changes over time.
States have used a variety of mechanisms to reduce income taxes on poor families. Nearly all states offer personal exemptions and/or standard deductions, which reduce the amount of income subject to taxation for all families including those with low incomes; in a number of states, these provisions by themselves are sufficient to lift the income tax threshold above the poverty line. In addition, many states have enacted provisions targeted to low- and moderate-income families. Some 16 states offer Earned Income Tax Credits, which are tax credits for working-poor families, mostly those with children.(2) Other states offer other types of low-income tax credits, such as New Mexico's "Low-Income Comprehensive Tax Rebate." Finally, a few states have "no-tax floors," which set a dollar level below which families owe no tax but do not affect tax liability for families above that level.
Future Changes in Income Tax Thresholds This report shows income tax thresholds for tax year 2001. As a part of legislation enacted in 2001 and in previous years, some states have adopted changes to their income tax systems that will lead to increased thresholds in 2002 and beyond. These changes will exempt poor families from taxation in Utah and also will raise the threshold above the poverty line for families of three in Oklahoma.
|
A Few States Tax the Incomes of the Poor More Heavily than in the Early 1990s
A smaller number of states stand out for their lack of progress in reducing income tax burdens on the poor.
- The Alabama threshold remains at $4,600, the lowest in the nation and the same level — in non-inflation adjusted terms — that it has been since the 1960s. Because the threshold has not changed while the cost of living and the poverty line have increased, the threshold as a percentage of the poverty line has fallen from 33 percent to 25 percent since 1991.
Over the last ten years, the Alabama tax burden on families with incomes at the poverty has risen. The income tax on a family of four with income at the poverty line in 2001 is $463, compared with $348 seven years ago — an 11 percent increase after adjusting for inflation.
- In Arkansas, Iowa, Louisiana, Ohio, Oklahoma, Virginia, and West Virginia, as in Alabama, the income taxes on families of four with poverty-level incomes have risen since 1994 even after taking inflation into account. As Table 6 shows, the increase in inflation-adjusted terms has been as much as 52 percent in Oklahoma, 44 percent in Louisiana, 41 percent in Virginia, and 27 percent in Arkansas.(3) In each of these states, the reason for the tax increase is that personal exemptions, credits, or other features designed to protect the incomes of low-income families from taxation have eroded due to inflation.
- In Kentucky, Louisiana, Ohio and West Virginia, as in Alabama, the income tax threshold is further below the poverty line than it was in 1991. In Kentucky, for instance, the threshold for a family of four has fallen from 36 percent of the poverty line in 1991 to 30 percent.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| State | Income | Tax | |
| 1 | Alabama | $14,129 | $388 |
| 2 | Kentucky | 14,129 | 361 |
| 3 | Hawaii | 14,129 | 294 |
| 4 | Indiana | 14,129 | 276 |
| 5 | West Virginia | 14,129 | 245 |
| 6 | Montana | 14,129 | 179 |
| 7 | Michigan | 14,129 | 178 |
| 8 | Oklahoma | 14,129 | 139 |
| 9 | Louisiana | 14,129 | 125 |
| 10 | Oregon | 14,129 | 86 |
| 11 | Ohio | 14,129 | 72 |
| 12 | Illinois | 14,129 | 54 |
| 13 | Georgia | 14,129 | 48 |
| 14 | Missouri | 14,129 | 26 |
| 15 | Utah | 14,129 | 22 |
| 16 | Arkansas | 14,129 | 20 |
| 17 | North Carolina | 14,129 | 14 |
| 18 | Virginia | 14,129 | 0 |
| 18 | South Carolina | 14,129 | 0 |
| 18 | Maine | 14,129 | 0 |
| 18 | California | 14,129 | 0 |
| 18 | Pennsylvania | 14,129 | 0 |
| 18 | Mississippi | 14,129 | 0 |
| 18 | Rhode Island | 14,129 | 0 |
| 18 | Iowa | 14,129 | 0 |
| 18 | Nebraska | 14,129 | 0 |
| 18 | Idaho | 14,129 | 0 |
| 18 | Connecticut | 14,129 | 0 |
| 18 | Arizona | 14,129 | 0 |
| 18 | Delaware | 14,129 | 0 |
| 18 | North Dakota | 14,129 | 0 |
| 32 | New Mexico | 14,129 | (75) |
| 33 | Kansas | 14,129 | (357) |
| 34 | Wisconsin | 14,129 | (381) |
| 35 | Maryland | 14,129 | (428) |
| 36 | New Jersey | 14,129 | (568) |
| 37 | Massachusetts | 14,129 | (569) |
| 38 | District of Columbia | 14,129 | (616) |
| 39 | Colorado | 14,129 | (679) |
| 40 | New York | 14,129 | (882) |
| 41 | Minnesota | 14,129 | (1,002) |
| 42 | Vermont | 14,129 | (1,213) |
Center on Budget and Policy Priorities |
|||
| State | Income | Tax | |
| 1 | Kentucky | $18,104 | $596 |
| 2 | Alabama | 18,104 | 463 |
| 3 | Hawaii | 18,104 | 422 |
| 4 | Indiana | 18,104 | 378 |
| 5 | Virginia | 18,104 | 365 |
| 6 | Arkansas | 18,104 | 326 |
| 7 | West Virginia | 18,104 | 306 |
| 8 | Oregon | 18,104 | 296 |
| 9 | Oklahoma | 18,104 | 252 |
| 10 | Montana | 18,104 | 239 |
| 11 | Michigan | 18,104 | 223 |
| 12 | Illinois | 18,104 | 156 |
| 13 | Louisiana | 18,104 | 143 |
| 14 | Ohio | 18,104 | 136 |
| 15 | Missouri | 18,104 | 89 |
| 16 | Georgia | 18,104 | 70 |
| 17 | North Carolina | 18,104 | 68 |
| 18 | Iowa | 18,104 | 61 |
| 19 | Utah | 18,104 | 43 |
| 20 | Nebraska | 18,104 | 0 |
| 20 | Maine | 18,104 | 0 |
| 20 | California | 18,104 | 0 |
| 20 | Mississippi | 18,104 | 0 |
| 20 | Rhode Island | 18,104 | 0 |
| 20 | Delaware | 18,104 | 0 |
| 20 | South Carolina | 18,104 | 0 |
| 20 | Arizona | 18,104 | 0 |
| 20 | North Dakota | 18,104 | 0 |
| 20 | Connecticut | 18,104 | 0 |
| 20 | Pennsylvania | 18,104 | 0 |
| 20 | Idaho | 18,104 | 0 |
| 32 | New Mexico | 18,104 | (60) |
| 33 | Kansas | 18,104 | (186) |
| 34 | District of Columbia | 18,104 | (191) |
| 35 | Maryland | 18,104 | (203) |
| 36 | Wisconsin | 18,104 | (401) |
| 37 | Massachusetts | 18,104 | (442) |
| 38 | New Jersey | 18,104 | (443) |
| 39 | Colorado | 18,104 | (595) |
| 40 | New York | 18,104 | (629) |
| 41 | Vermont | 18,104 | (943) |
| 42 | Minnesota | 18,104 | (1,402) |
Center on Budget and Policy Priorities |
|||
| State | Income* | Tax | |
| 1 | Alabama | $10,712 | $218 |
| 2 | Kentucky | 10,712 | 208 |
| 3 | West Virginia | 10,712 | 143 |
| 4 | Indiana | 10,712 | 116 |
| 5 | Hawaii** | 10,920 | 89 |
| 6 | Oklahoma | 10,712 | 63 |
| 7 | Montana | 10,712 | 59 |
| 8 | Oregon** | 13,520 | 38 |
| 9 | Michigan | 10,712 | 34 |
| 10 | Ohio | 10,712 | 11 |
| 11 | Arizona | 10,712 | 0 |
| 11 | Arkansas | 10,712 | 0 |
| 11 | California** | 13,000 | 0 |
| 11 | Connecticut** | 13,312 | 0 |
| 11 | Delaware** | 12,792 | 0 |
| 11 | Idaho | 10,712 | 0 |
| 11 | Illinois | 10,712 | 0 |
| 11 | Iowa | 10,712 | 0 |
| 11 | Louisiana | 10,712 | 0 |
| 11 | Maine | 10,712 | 0 |
| 11 | Mississippi | 10,712 | 0 |
| 11 | Missouri | 10,712 | 0 |
| 11 | Nebraska | 10,712 | 0 |
| 11 | North Carolina | 10,712 | 0 |
| 11 | North Dakota | 10,712 | 0 |
| 11 | Pennsylvania | 10,712 | 0 |
| 11 | Rhode Island** | 12,792 | 0 |
| 11 | South Carolina | 10,712 | 0 |
| 11 | Utah | 10,712 | 0 |
| 11 | Virginia | 10,712 | 0 |
| 31 | Georgia | 10,712 | (21) |
| 32 | New Mexico | 10,712 | (100) |
| 33 | Kansas | 10,712 | (401) |
| 34 | Colorado | 10,712 | (472) |
| 35 | Wisconsin | 10,712 | (561) |
| 36 | Massachusetts** | 14,040 | (572) |
| 37 | New Jersey | 10,712 | (601) |
| 38 | Maryland | 10,712 | (608) |
| 39 | District of Columbia** | 12,792 | (736) |
| 40 | Minnesota | 10,712 | (1,002) |
| 40 | New York | 10,712 | (1,002) |
| 42 | Vermont** | 13,000 | (1,283) |
| *
Income for full-time, year-round minimum wage earnings for one worker (52 weeks, 40 hours/
week). ** These nine states had a minimum wage higher than the federal minimum wage in all or part of 2000. Center on Budget and Policy Priorities |
|||
State |
Income* |
Tax | |
| 1 | Kentucky | $10,712 | $193 |
| 2 | Alabama | 10,712 | 178 |
| 3 | West Virginia | 10,712 | 83 |
| 4 | Indiana | 10,712 | 82 |
| 5 | Montana | 10,712 | 19 |
| 6 | Arizona | 10,712 | 0 |
| 6 | Arkansas | 10,712 | 0 |
| 6 | California** | 13,000 | 0 |
| 6 | Connecticut** | 13,312 | 0 |
| 6 | Delaware** | 12,792 | 0 |
| 6 | Idaho | 10,712 | 0 |
| 6 | Illinois | 10,712 | 0 |
| 6 | Iowa | 10,712 | 0 |
| 6 | Louisiana | 10,712 | 0 |
| 6 | Maine | 10,712 | 0 |
| 6 | Michigan | 10,712 | 0 |
| 6 | Mississippi | 10,712 | 0 |
| 6 | Missouri | 10,712 | 0 |
| 6 | Nebraska | 10,712 | 0 |
| 6 | North Carolina | 10,712 | 0 |
| 6 | North Dakota | 10,712 | 0 |
| 6 | Ohio | 10,712 | 0 |
| 6 | Oklahoma | 10,712 | 0 |
| 6 | Oregon** | 13,520 | 0 |
| 6 | Pennsylvania | 10,712 | 0 |
| 6 | Rhode Island** | 12,792 | 0 |
| 6 | South Carolina | 10,712 | 0 |
| 6 | Utah | 10,712 | 0 |
| 6 | Virginia | 10,712 | 0 |
| 30 | Hawaii** | 10,920 | (12) |
| 31 | Georgia | 10,712 | (32) |
| 32 | New Mexico | 10,712 | (130) |
| 33 | Kansas | 10,712 | (401) |
| 34 | Colorado | 10,712 | (472) |
| 35 | Wisconsin | 10,712 | (561) |
| 36 | Massachusetts** | 14,040 | (572) |
| 37 | New Jersey | 10,712 | (601) |
| 38 | Maryland | 10,712 | (641) |
| 39 | District of Columbia** | 12,792 | (736) |
| 40 | Minnesota | 10,712 | (1,002) |
| 40 | New York | 10,712 | (1,002) |
| 42 | Vermont** | 13,000 | (1,283) |
| *
Income for full-time, year-round minimum wage earnings for one worker (52 weeks, 40
hours/week). ** These nine states had a minimum wage higher than the federal minimum wage in all or part of 2000. Center on Budget and Policy Priorities |
|||
| State | Income | Tax | |
| 1 | Kentucky | $17,661 | $592 |
| 2 | Hawaii | 17,661 | 567 |
| 3 | Alabama | 17,661 | 563 |
| 4 | Virginia | 17,661 | 483 |
| 5 | Oregon | 17,661 | 424 |
| 6 | Indiana | 17,661 | 396 |
| 7 | Arkansas | 17,661 | 394 |
| 8 | West Virginia | 17,661 | 366 |
| 9 | Michigan | 17,661 | 326 |
| 10 | Montana | 17,661 | 297 |
| 11 | Oklahoma | 17,661 | 279 |
| 12 | Louisiana | 17,661 | 265 |
| 13 | North Carolina | 17,661 | 227 |
| 14 | Illinois | 17,661 | 198 |
| 15 | Georgia | 17,661 | 187 |
| 16 | Ohio | 17,661 | 177 |
| 17 | Delaware | 17,661 | 143 |
| 18 | Utah | 17,661 | 141 |
| 19 | Missouri | 17,661 | 131 |
| 20 | Mississippi | 17,661 | 98 |
| 21 | Nebraska | 17,661 | 66 |
| 22 | Idaho | 17,661 | 51 |
| 23 | North Dakota | 17,661 | 49 |
| 24 | Iowa | 17,661 | 16 |
| 25 | Arizona | 17,661 | 0 |
| 25 | California | 17,661 | 0 |
| 25 | Connecticut | 17,661 | 0 |
| 25 | Maine | 17,661 | 0 |
| 25 | Pennsylvania | 17,661 | 0 |
| 25 | Rhode Island | 17,661 | 0 |
| 25 | South Carolina | 17,661 | 0 |
| 32 | New Mexico | 17,661 | (20) |
| 33 | Wisconsin | 17,661 | (79) |
| 34 | Maryland | 17,661 | (139) |
| 35 | Kansas | 17,661 | (158) |
| 36 | District of Columbia | 17,661 | (248) |
| 37 | Massachusetts | 17,661 | (330) |
| 38 | New Jersey | 17,661 | (457) |
| 39 | Colorado | 17,661 | (496) |
| 40 | New York | 17,661 | (554) |
| 41 | Vermont | 17,661 | (888) |
| 42 | Minnesota | 17,661 | (1,276) |
Center on Budget and Policy Priorities |
|||
| State | Income | Tax | |
| 1 | Kentucky | $22,630 | $922 |
| 2 | Hawaii | 22,630 | 756 |
| 3 | Oregon | 22,630 | 749 |
| 4 | Alabama | 22,630 | 673 |
| 5 | Virginia | 22,630 | 591 |
| 6 | Arkansas | 22,630 | 563 |
| 7 | Indiana | 22,630 | 531 |
| 8 | Iowa | 22,630 | 530 |
| 9 | Oklahoma | 22,630 | 493 |
| 10 | West Virginia | 22,630 | 486 |
| 11 | Michigan | 22,630 | 413 |
| 12 | Montana | 22,630 | 410 |
| 13 | District of Columbia | 22,630 | 388 |
| 14 | Illinois | 22,630 | 339 |
| 15 | North Carolina | 22,630 | 338 |
| 16 | Ohio | 22,630 | 292 |
| 17 | Louisiana | 22,630 | 285 |
| 17 | Missouri | 22,630 | 285 |
| 19 | Georgia | 22,630 | 282 |
| 20 | New Jersey | 22,630 | 247 |
| 21 | Utah | 22,630 | 229 |
| 22 | Delaware | 22,630 | 115 |
| 23 | Nebraska | 22,630 | 110 |
| 24 | Mississippi | 22,630 | 91 |
| 25 | Wisconsin | 22,630 | 86 |
| 26 | North Dakota | 22,630 | 72 |
| 27 | Kansas | 22,630 | 67 |
| 28 | New Mexico | 22,630 | 59 |
| 29 | Idaho | 22,630 | 41 |
| 30 | South Carolina | 22,630 | 13 |
| 31 | Arizona | 22,630 | 0 |
| 31 | California | 22,630 | 0 |
| 31 | Connecticut | 22,630 | 0 |
| 31 | Maine | 22,630 | 0 |
| 31 | Maryland | 22,630 | 0 |
| 31 | Pennsylvania | 22,630 | 0 |
| 31 | Rhode Island | 22,630 | 0 |
| 38 | Massachusetts | 22,630 | (5) |
| 39 | New York | 22,630 | (211) |
| 40 | Colorado | 22,630 | (410) |
| 41 | Vermont | 22,630 | (516) |
| 42 | Minnesota | 22,630 | (784) |
Center on Budget and Policy Priorities |
|||
| 1991 | 1994 | 1997 | 2000 | 2001 | Change 1991-2001 |
|
| Alabama | $4,600 | $4,600 | $4,600 | $4,600 | $4,600 | $0 |
| Arizona | 15,000 | 15,800 | 20,000 | 23,600 | 23,600 | 8,600 |
| Arkansas | 10,700 | 10,700 | 10,700 | 15,600 | 15,600 | 4,900 |
| California | 20,900 | 22,600 | 23,800 | 36,800 | 38,800 | 17,900 |
| Colorado | 14,300 | 16,200 | 17,500 | 27,900 | 28,700 | 14,400 |
| Connecticut | 24,100 | 24,100 | 24,100 | 24,100 | 24,100 | 0 |
| Delaware | 8,600 | 8,600 | 12,700 | 20,300 | 20,300 | 11,700 |
| District of Columbia | 14,300 | 16,200 | 17,500 | 18,600 | 19,600 | 5,300 |
| Georgia | 9,000 | 11,100 | 13,100 | 15,300 | 15,300 | 6,300 |
| Hawaii | 6,300 | 6,300 | 6,100 | 11,000 | 11,300 | 5,000 |
| Idaho | 14,300 | 16,200 | 17,500 | 20,100 | 20,800 | 6,500 |
| Illinois | 4,000 | 4,000 | 4,000 | 14,000 | 14,300 | 10,300 |
| Indiana | 4,000 | 4,000 | 8,500 | 9,500 | 9,500 | 5,500 |
| Iowa | 9,000 | 15,300 | 16,500 | 17,400 | 17,500 | 8,500 |
| Kansas | 13,000 | 13,000 | 13,000 | 21,100 | 21,500 | 8,500 |
| Kentucky | 5,000 | 5,000 | 5,000 | 5,400 | 5,500 | 500 |
| Louisiana | 11,000 | 11,000 | 12,300 | 13,000 | 13,400 | 2,400 |
| Maine | 14,100 | 14,800 | 17,500 | 23,100 | 23,500 | 9,400 |
| Maryland | 15,800 | 19,400 | 22,900 | 25,200 | 26,300 | 10,500 |
| Massachusetts | 12,000 | 12,000 | 17,400 | 20,600 | 22,700 | 10,700 |
| Michigan | 8,400 | 8,400 | 10,000 | 12,800 | 12,800 | 4,400 |
| Minnesota | 15,500 | 19,000 | 21,600 | 26,800 | 27,700 | 12,200 |
| Mississippi | 15,900 | 15,900 | 15,900 | 19,600 | 19,600 | 3,700 |
| Missouri | 8,900 | 9,700 | 10,200 | 14,100 | 14,300 | 5,400 |
| Montana | 6,600 | 7,200 | 8,800 | 9,500 | 9,800 | 3,200 |
| Nebraska | 14,300 | 16,200 | 17,900 | 18,900 | 19,500 | 5,200 |
| New Jersey | 5,000 | 7,500 | 7,500 | 20,000 | 20,000 | 15,000 |
| New Mexico | 14,300 | 16,300 | 17,500 | 21,000 | 21,300 | 7,000 |
| New York | 14,000 | 16,900 | 22,300 | 23,800 | 24,900 | 10,900 |
| North Carolina | 13,000 | 13,000 | 17,000 | 17,000 | 17,000 | 4,000 |
| North Dakota | 14,700 | 16,500 | 18,000 | 19,000 | 19,700 | 5,000 |
| Ohio | 10,500 | 10,500 | 12,000 | 12,700 | 12,500 | 2,000 |
| Oklahoma | 10,000 | 10,900 | 12,200 | 13,000 | 13,400 | 3,400 |
| Oregon | 10,100 | 10,900 | 14,000 | 14,800 | 15,100 | 5,000 |
| Pennsylvania | 9,800 | 15,300 | 20,600 | 28,000 | 30,000 | 20,200 |
| Rhode Island | 17,400 | 21,100 | 24,400 | 25,900 | 26,800 | 9,400 |
| South Carolina | 14,300 | 16,800 | 20,200 | 21,400 | 22,100 | 7,800 |
| Utah | 12,200 | 13,600 | 14,900 | 15,800 | 16,300 | 4,100 |
| Vermont | 17,400 | 21,100 | 24,400 | 26,800 | 27,600 | 10,200 |
| Virginia | 8,200 | 8,200 | 8,200 | 17,100 | 17,700 | 9,500 |
| West Virginia | 8,000 | 8,000 | 10,000 | 10,000 | 10,000 | 2,000 |
| Wisconsin | 14,400 | 16,400 | 17,000 | 20,700 | 21,600 | 7,200 |
| Average | $11,736 | $13,102 | $14,983 | $18,474 | $18,967 | $7,231 |
| Federal Poverty Line | $13,924 | $15,141 | $16,400 | $17,603 | $18,104 | $4,180 |
| Average as % poverty | 84% | 87% | 91% | 105% | 105% | + 20% |
| Center on Budget and Policy Priorities | ||||||
| 1994 | 2000 | 2001 | Change 94-01 |
Percent change |
|
| Oklahoma | $139 | $232 | $252 | $113 | 52% |
| Louisiana | 83 | 133 | 143 | 60 | 44% |
| Virginia | 217 | 341 | 365 | 148 | 41% |
| Arkansas | 214 | 311 | 326 | 112 | 27% |
| West Virginia | 215 | 290 | 306 | 91 | 19% |
| Alabama | 348 | 443 | 463 | 115 | 11% |
| Ohio | 107 | 113 | 136 | 29 | 6% |
| Iowa | 0 | 23 | 61 | 61 | n/a |
| Kentucky | 499 | 575 | 596 | 97 | -0% |
| Utah | 37 | 47 | 43 | 6 | -3% |
| Montana | 211 | 233 | 239 | 28 | -5% |
| Hawaii | 406 | 420 | 422 | 16 | -13% |
| Indiana | 379 | 360 | 378 | (1) | -17% |
| Oregon | 331 | 278 | 296 | (35) | -25% |
| Michigan | 301 | 202 | 223 | (78) | -38% |
| Missouri | 147 | 80 | 89 | (58) | -49% |
| Georgia | 116 | 55 | 70 | (46) | -50% |
| North Carolina | 128 | 37 | 68 | (60) | -56% |
| Illinois | 334 | 145 | 156 | (178) | -61% |
| — | — | — | — | — | |
| Average | $222 |
$227 |
$244 |
22 |
-8% |
Notes:
Dollar amounts shown are nominal amounts. |
|||||
Report | State Contacts | State Fact Sheets
If you have problems viewing the report, right-click on the underlined text of the link, select "Save Link As," download the file to your local directory, and then launch Adobe Acrobat Reader to view the document.
End Notes
1. For a more detailed analysis of the changes that individual states have made to their income taxes affecting low-income families since the early 1990s, the reasons why such changes are important, and the ways other states can implement such changes, see Bob Zahradnik, Nicholas Johnson and Michael Mazerov, State Income Tax Burdens on Low-Income Families in 2000: Assessing the Burden and Opportunities for Relief, Center on Budget and Policy Priorities, March 2001.
2. A full description of current state EITCs and policy issues relating to them may be found in Nicholas Johnson, A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty in 2001, Center on Budget and Policy Priorities, December 2001.
3. Beginning in tax year 2002, Oklahoma is implementing a state Earned Income Tax Credit that eliminates this tax increase.