Are state taxes hard on low-income families? -, South Georgia News, Weather, Sports

Are state taxes hard on low-income families?

March 6, 2006

Albany-- More than 30 million Americans live in poverty. As that poverty rate rises, many people's paychecks aren't. One new study shows Georgia's working-poor pay more income tax than those in many other states.

It finds that many states tax families even if their income falls below the poverty line. For many families, it's too much from a paycheck. Tax preparers say, it all balances out.

With a smile, Amber Swords makes a hard living making sure others are satisfied. "I wouldn't say anything is ever easy," says Swords. It's a busy job, but the busy times help pay the bills. "I would love to be at home day and night with my son but just with my husband's income, it just makes it easier to have that little bit of extra income," says Swords.

It's that extra income that brings many working families closer to living comfortably but it also means more taxes. "It's a struggle when tax season comes because you just hope that you don't have to pay in every year," says Swords. According to a study by the Center on Budget and Policy Priorities, state income taxes are pushing many working-poor families deeper into poverty.

"The more you earn, the more tax you pay," says Tax Advisor for H&R Block Vish Pandey.

Pandey says it is hard for many families to manage on low incomes but from a tax point of view, they're not taxed very high and families with kids get extra benefits. "They get $4,400 of earned income credit from the government. They don't pay any tax," says Pandey. He says there's also some relief from the state.

"For the state of Georgia, if someone gets less than $20,000 per year then he's entitled to what is called low-income credit," says Pandey. Pandey feels it isn't the taxes that's affecting families. It's their earnings and expenses. For Amber, those earnings keep her motivated.

"My motivation is just to be able to provide for my family. That's the most motivation I have," says Swords. And with another son on the way, it's enough to keep her standing for now.

According to the study, the number of states that tax low-income families has increased since 2004. It ranks Georgia at number 7th out of 42 states when it comes to taxing single parent families of three. The study also shows that the income level at which many people start paying taxes is going down and that trend could continue putting more of a burden on poor families if states don't change their tax laws.


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