Indiana

Poor Families in Indiana Are Hit Harder by the Income Tax Than Those in Other States

 

Indiana’s 1999 income tax threshold — the income level at which families begin paying income tax:	Ranking among 42 states with income taxes
For two-parent families of four: $9,500.	6th lowest
For single-parent families of three: $9,000.	6th lowest (tie)
Indiana’s 1999 income tax on working-poor and near-poor families:
For families of four with incomes at the poverty line ($17,028): $341.	4th highest
For families of three with incomes at the poverty line ($13,290): $248.	6th highest
For families of three with minimum-wage earnings ($10,712): $116.	6th highest
For families of four with incomes at 125% of the poverty line ($21,285): $486.	8th highest
For families of three with incomes at 125% of the poverty line ($16,613): $361.	7th highest
Despite progress, Indiana continues to tax families with incomes below the poverty line. Indiana’s tax threshold for families of four more than doubled in 1997, but a substantial gap remains between the threshold and the poverty line. In 1991, a family of four owed tax when its income exceeded 29 percent of the poverty line. For 1999, Indiana’s tax threshold has risen to 56 percent of the poverty line.