State and Local Tax Systems Hit Lower-Income Families the Hardest

January 15, 2015 at 9:59 am

In nearly every state, low- and middle-income families pay a bigger share of their income in state and local taxes than wealthy families, a new report from the Institute on Taxation and Economic Policy (ITEP) finds.  As the New York Times’ Patricia Cohen wrote, “When it comes to the taxes closest to home, the less you earn, the harder you’re hit.”

Only California taxes the top 1 percent of households at a higher effective rate (8.7 percent) than middle-income taxpayers (8.2 percent), ITEP found.  … Read more

IRS Funding Cuts Harm Customer Service and Raise Deficits

January 14, 2015 at 4:56 pm

Honest taxpayers will feel the pain of Congress’ cuts in the IRS budget, new reports from National Taxpayer Advocate Nina Olson and IRS Commissioner John Koskinen confirm.  As we’ve written, funding cuts in recent years have compromised taxpayer service and weakened enforcement of the nation’s tax laws.  Olson warns that this year’s cuts will worsen these problems, predicting that taxpayers will likely receive the worst service from the IRS in over a decade.

Congress has cut IRS funding sharply since 2010 (see chart), despite repeated warnings of the negative effects.  … Read more

Working-Family Tax Credit Essentials, Part 1: Overview

January 13, 2015 at 4:43 pm

As Congress returns to work this week, a key area of potential bipartisan agreement is strengthening two vital tax credits for working families: the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).  This series of posts will highlight our new chart book on the credits, which encourage work, help offset the cost of raising children, and lift millions out of poverty.  (Roughly half the states also have their own EITCs to build on the benefits of the federal EITC.)

The EITC and CTC have historically received bipartisan support. … Read more

Who Are the People Who Will Lose SNAP Next Year?

January 13, 2015 at 3:36 pm

This infographic summarizes basic facts about unemployed childless adults receiving SNAP (formerly food stamps), roughly 1 million of whom will be cut off SNAP over the course of 2016 — regardless of how hard they are looking for work — as a three-month time limit on benefits returns in many areas.  (Click here for full image. Click here for printable version.)

Congress should revise the harsh three-month cutoff to better accomplish its stated goal of testing individuals’ willingness to work. … Read more

More Uninsured, Higher Premiums if Subsidies End in Federal Marketplace

January 12, 2015 at 1:53 pm

Millions more Americans would be uninsured and premiums in the individual (nongroup) market would jump if the Supreme Court disallowed health reform subsidies for people getting coverage through the federal marketplace, new studies from the Urban Institute and RAND Corporation show.

These studies show why it’s critical for the Supreme Court to recognize that health reform provides subsidies in all states.

As we’ve explained, plaintiffs in a case before the Court claim that under the Affordable Care Act (ACA), premium credits to help eligible people afford marketplace coverage are supposed to be available only in states that set up their own marketplaces.… Read more

In Case You Missed It . . .

January 9, 2015 at 3:07 pm

Happy New Year from all of us at CBPP. We started the year at Off the Charts by focusing on health reform, Social Security, food assistance, the federal budget and taxes, and jobs.

  • On health reform, Paul Van de Water explained that raising the threshold for the employer mandate to 40 hours would place more workers at risk of having their hours cut. Robert Greenstein rebutted the claim that raising the threshold would safeguard the 40-hour work week. Judy Solomon noted that residents of 34 states with federally run health insurance marketplaces won’t have to repay their premium tax credits regardless of the outcome of a related Supreme Court case.  
Read more

School Jobs Up in December But Still Far From Recovered

January 9, 2015 at 2:17 pm


Local school districts added 2,000 jobs for teachers, principals, and other employees in December, today’s jobs report shows, continuing schools’ painfully slow recovery from the recession.

Yet schools still have a long way to go before they leave the recession behind.  School districts nationally employ 268,000 fewer workers than in the fall of 2008, the first full school year after the recession started — even as the number of students has risen by about 485,000. (See chart.)

Strong schools are a crucial building block of a healthy economy, and states and localities should make the investments necessary to rebuild and strengthen them. … Read more

Today’s Jobs Report in Pictures

January 9, 2015 at 9:54 am

Today’s jobs report shows a labor market that strengthened significantly in 2014, but one that still bears scars from the Great Recession and subsequent federal budget cuts and other austerity policies that perpetuated a severe jobs slump even as the economy and business profits began to recover.

Employers added an average of 246,000 jobs a month in 2014 and unemployment fell below 6 percent.  At the same time, too many people who want a job haven’t found one, especially among the long-term unemployed.… Read more

Adults’ Uninsured Rate Falls Further, Reflecting Big Gains Under Health Reform

January 8, 2015 at 4:26 pm

The share of adults without health insurance fell again to 12.9 percent in the fourth quarter of 2014, new survey results from Gallup and Healthways show.  This is down from 13.4 percent in the previous quarter and 17.1 percent in the fourth quarter of 2013, before health reform’s major coverage expansions — through Medicaid and subsidized marketplace coverage — took effect in January 2014.  (See chart.)  It’s also the lowest uninsured rate among adults since Gallup started collecting the survey data in 2008.… Read more

Mapping Disability Receipt

January 8, 2015 at 3:31 pm

Disability programs are in the news due to the controversy over replenishing Social Security’s Disability Insurance (DI) trust fund.  While people who receive disability payments from DI or Supplemental Security Income (SSI) live in every state, county, and congressional district, some areas have much higher rates of disability receipt than others — a fact that critics sometimes cite as evidence of problems with the programs.  In reality, this “geography of disability” mostly reflects a few key demographic and economic factors, as our new paper explains.… Read more

Getting It Wrong on Disability Insurance

January 7, 2015 at 4:45 pm

I’ve explained that a new House rule will make it harder to reapportion payroll taxes between Social Security’s retirement and Disability Insurance (DI) trust funds to avert a one-fifth cut in benefits to severely impaired DI recipients in late 2016.  In a revealing statement, co-sponsor Representative Tom Reed (R-NY) says the change is designed to prevent Congress from “raiding Social Security to bail out a failing federal program.”  He’s doubly wrong.

First, far from “failing,” DI has grown mostly in response to well-understood demographic and program factors like the aging of the baby boom, and the program’s trustees have long anticipated the need to replenish the trust fund next year, as I noted yesterday. … Read more

1 Million People Facing Cutoff of SNAP Benefits Next Year

January 7, 2015 at 12:18 pm

Roughly 1 million of the nation’s poorest people will be cut off SNAP (formerly food stamps) over the course of 2016 — even if they’re looking for a job but can’t find one —because a three-month time limit on benefits for unemployed childless adults who aren’t disabled will return in many geographic areas.

As our new report explains, the affected people will lose an average of $150 to $200 per person per month.  For this group, that’s a dramatic loss.  People subject to the three-month limit have average monthly income of about 19 percent of the poverty line (about $2,200 per year for a household of one in 2014), and they typically don’t qualify for other income support.… Read more