Tax Breakdown Shows Who Really Pays the Most

Citizens for Tax Justice (CTJ), a research organization advocating for the development of a fair tax system, recently released an aggregate view of Who Pays Taxes in America. The report corrects the common misconception that many lower income Americans do not pay taxes while higher income earners shoulder the burden of taxes. While it is true that the federal personal income tax is a form of progressive tax, meaning that those with a higher income pay a higher percentage of their income in taxes, the overall tax system is barely progressive. Once federal payroll taxes, federal excise taxes, and state and local taxes are taken into account, a harsh reality is revealed: “The share of total taxes paid by the poorest fifth of Americans (2.1 percent) is only slightly less than this group’s share of total income (3.4 percent).” Even more revealing is that the taxes paid by the nation’s highest income earners are not “dramatically higher” than taxes paid by the middle class, as “the total effective tax rate for the richest one percent (29.0 percent) is only about four percentage points higher than the total effective tax rate for the middle fifth of taxpayers (25.2 percent).” When accounting for total taxes paid by middle income earners and the top 5% of Americans, the overall tax rate hovers equally around 29-30 percent. 

The inequities created by the current tax system is demonstrate the need for comprehensive tax reform, and at the very least, reinforces the argument to maintain current income tax exemptions to balance the other regressive elements of the United States tax system. A regressive tax system is one in which tax rates decrease as income levels rise. For example, since state sales tax becomes a smaller proportion of total income as one’s income levels rise, this can be considered a regressive tax that places a higher burden on those with lower incomes than those with more disposable income able to pay the tax on everyday items, like household products or gasoline.

The Institute on Taxation and Economic Policy, a non-partisan research organization, has a clear breakdown of who pays what, state by state. To see how taxes are distributed in your state, read their report that finds that, on average, the poorest earners pay the highest effective tax rates as a result of local tax policy - regardless of federal tax exemptions that exist to aid this population. 

This report, however, does not address that some of the highest income earners in the country pay significantly less than the average American due to loopholes in the United States tax system. The CTJ has a wide array of educational materials regarding current tax reform proposals, including how to implement the so-called “Buffett Rule,” and other suggestions to implement a tax system that fairly distributes tax burdens.

To better understand why we need a tax system that does not disproportionately affect the poor, visit PolicyforResults.org to learn more about economic and social disparities that impact low-income children and their families.  

A Resource: Basic Facts about Low Income Children

There are a number of factors associated with children experiencing economic insecurity - for example both race and ethnicity and parental educational attainment are associated with the likelihood a child experiencing poverty. In order for policymakers to ensure that in the future all children grow up in economically secure and stable families – it is important to understand the facts about children in low-income households. The National Center for Children in Poverty (NCCP) recently released, Basic Facts about Low Income Children, 2010. This fact sheet includes the most current data available on children living in low income households in the United States. The fact sheet includes geographic and demographic information regarding low income children as well as general facts about poverty and rates of low income households in the United States.

For results-based state policy strategies for ensuring children grow up in safe supportive and economically successful families visit PolicyforResults.org.

April is National Minority Health Month

The U.S. Department of Health and Human Services is commemorating National Minority Health Month by encouraging Town Halls and hosting events throughout the month to raise awareness of the disparities that exist in health care. While the average quality of health care has risen over the past few decades, disparities to health care access and quality of care have not improved. In a press release, HHS highlights how the Affordable Care Act (ACA) has already improved health disparities by providing coverage to previously uninsured minorities and eliminating co-pays or deductibles for some essential preventative services.

During last year’s Minority Health Month, HHS announced its first initiative solely focused on resolving disparities to health care access. The HHS Action Plan to Reduce Racial and Ethnic Health Disparities builds on the Affordable Care Act and other existing strategies, such as Healthy People 2020, to reduce health disparities among minorities. The report outlines where and why health disparities exist and carries five policy goals to remove those disparities: Transform Health Care; Strengthen the Nation’s Health and Human Services Infrastructure and Workforce; Advance the Health, Safety, and Well-Being of the American People; Advance Scientific Knowledge and Innovation; and Increase Efficiency, Transparency, and Accountability of HHS Programs. Under these five goals, HHS highlights specific actions useful to policy makers at every level of government. The report provides comprehensive strategies that policymakers can take to improve quality of care not only for minorities, but ultimately for everyone who needs health care.  

Following the message behind their Action Plan, the theme for this year’s Minority Health Month is “Health Equity Can’t Wait. Act Now in Your CommUnity” to emphasize the importance of community-based initiatives in improving access to and quality of health care.  For more information on events for this month, visit the HHS Office of Minority Health’s website.

The National Institute of Health is also celebrating the month through its first NIH Minority Health Promotion Day, sponsored by the National Institute of Minority Health and Health Disparities, on April 19^th. Various exhibits and speakers will present how social and economic factors contribute to and maintain health disparities in our health care system.

For state policymakers, Minority Health Month provides a great opportunity to raise awareness around the importance of quality health care access and a good time to promote efforts to improve that access in communities across the states.  For results based policy solutions to ensure that all children are healthy, visit PolicyforResults.org.  

New on Policy for Results! Promoting Workforce Strategies for Reintegrating Ex-offenders

When ex-offenders are productively engaged in their communities - working and supporting their families - the community is safer and their families are more economically secure.

As a part of its commitment to ensuring that all children grow up in safe, supportive and economically successful families, the Center for the Study of Social Policy has developed a new section on PolicyforResults and a corresponding report that focus specifically on promoting workforce strategies for reintegrating ex-offenders.

The information in this section is designed to support policymakers in their efforts to ensure that all families have access to the supports they need to be successful and economically secure. In addition to facts about the issue, the new section includes policy strategies that states can use to promote successful transitions to work for ex-offenders and in doing so reduce recidivism rates – leading to safer communities for all children.

Visit PolicyforResults.org to learn more.

Child Nutrition All-Year Round

Springtime means that many schools across the country will soon break for the summer. When school lets out, millions of low-income children lose access to the school breakfasts, lunches and afterschool snacks they receive during the regular school year. Summer Nutrition Programs are designed to address this problem by providing those needed meals - often times along with educational and recreational activities. The Food Resource Action Center (FRAC) provides a number of useful resources about Summer Nutrition Programs, including highlights of model summer meal programs, a summer food site locator, and a summer nutrition tool kit.

The federal government provides two sources of support for summer meals including – the Summer Food Service Program and the National School Lunch Program. For state policymakers – considering policy options to support children during their out of school time and to ensure that children do not go hungry is an important responsibility. State policymakers can help ensure that an increased number of children are served by the Summer Nutrition Programs by growing the programs through site recruitment and family outreach and passing mandates requiring that some schools operate the Summer Nutrition Programs. According to FRAC, Florida and Ohio recently passed such mandates.

For results-based policy strategies to ensure that children are healthy visit PolicyforResults.org.

Full Day Kindergarten

The Children's Defense Fund created an interactive map to provide a snapshot of kindergarten across the states. As noted by CDF, there is a wide variety in the provision of kindergarten;

• 10 states and the District of Columbia require school districts to provide publicly funded full-day kindergarten through state statute, which guarantees annual funding.
• 34 states (not including those with Full-Day K) require school districts to provide half-day kindergarten.
• Six states do not require districts to provide kindergarten at all.

Where school districts provide opportunities for full-day kindergarten - there are also significant differences in the ways that it is funded, which has an additional impact on families. Some schools publicly fund full-day kindergarten, in others parents pay tuition for the second half of the day, and some schools provide tuition assistance based on income or risk of school failure.

Kindergarten is an important step in a child's education. Ensuring that policy promotes equitable opportunities for children to strengthen the social and foundational skills needed to be successful in school is important to ensuring positive life outcomes.

Click here to review the interactive map and the full-day kindergarten fact sheet by CDF.

Visit PolicyforResults to learn more about results-based policy strategies to ensure children enter school ready to learn and prepared to succeed.