Report says Conn. poor taxed more than rich

A new report by the advocacy group Connecticut Voices for Children says 180,000 households benefited from Connecticut’s Earned Income Tax Credit last year. And the report’s authors say the state taxes poor people at a higher percentage than the rich.

You can hear Will Stone’s story on the EITC report here:
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Governor Dannel Malloy launched the EITC in 2011 as a supplement to the federal tax credit. It’s designed to help working families, especially those with children. On average, households that filed for the credit were making $18,000 a year and received a credit of $600. The credit depends on income and number of children, though, which means a family with two children, could receive a maximum credit of about $1,500.

Wade Gibson of Connecticut Voices for Children is one of the authors of the report. He says these families are already shouldering a heavy tax burden.

“These folks are the highest taxed people in Connecticut in terms of state and local taxes because in Connecticut we actually tax poor people more as a proportion of their income than we tax rich people. About twice as much actually”

Gibson says this discrepancy results from the way property and sales taxes affect different communities. For example, he says a family making 18,000 dollars a year will spend more of its money on goods. And as a result about 5% of their income will be spent on sales taxes alone. The state credit is currently 30% of the federal income tax credit. He says the two credits will continue to be crucial in keeping Connecticut families out of poverty.