The leftist Center for the Budget and Policy Priorities, in a study reported by its affiliate the Louisiana Budget Project, identifies Louisiana as one of a minority of states where households whose reported income falls below the poverty line pay state income taxes. Which should elicit a huge collective yawn from citizens and policy-makers considering the report’s incomplete picture and lack of context with larger policy concerns, but should generate concern if then used to justify having fewer people pull the wagon while more jump on it.
The report notes that, while the majority of states create no tax burden on households defined as poor and in some of these, through an earned income tax credit, they actually receive money from the state for not paying state income tax, in Louisiana the cutoff for not owing tax is slightly below that of the poverty level, although slightly above it for earners of the minimum wage (which comprise a very small proportion of all adult earners in the state). The same holds true for families at the 125 percent of poverty level, a small amount of tax due.
The national group generally, and the state group specifically, express concern that the “poor” (who in many cases, in comparative perspective, are anything but) must pay any income tax at all, and worry that a trend may develop where more states extend that taxation to lower income households.