Scott Walker’s War on Poverty

By “war on poverty,” I mean war on the poor.  Scott Walker is raising taxes on the backs of Wisconsin’s most vulnerable citizens.

When the W-2s come out next January, many of Wisconsin’s poorest families will be in for a rude awakening; a hike in their tax bill.

Last summer, the state Legislature reduced the amount of money low- income families can receive in tax credits by $56.2 million.

That places Wisconsin among only a handful of states that will effectively raise taxes on their poorest residents in 2012, according to a recent study by the Center on Budget and Policy Priorities, a nonprofit think tank.

So while Wisconsin homeowners across the state discover to their surpass the extent of Walker’s state-wide property tax increase, families living on the margins of society will experience a sticker shock of their own next year.

The 2011-2013 state budget reduces the percentages for families with two or more children, which the state Legislative Fiscal Bureau considers a net tax increase.

Starting next year, low-income families with two children will be capped at 11 percent of the maximum federal credit, or $562, down from $716.

Families with three or more children will be limited to 34 percent, or $1,955, down from $2,473.

Governor Walker claims this does not represent a real “tax increase” because

the majority of tax credit recipients don’t make enough money to owe state income taxes … which means they actually receive the credit as a refund in the form of a check.

So let me get this straight.  Because these people are so poor that they don’t pay enough in taxes to be able to take advantage of the credit based on their meager income that the state must send them a check to help pay for their basic needs, this is somehow not a tax increase?  I’m flabbergasted.  My WTF-o-meter needle is pegged solid in the red on this one.  Families so poor that they don’t make enough to have sufficient money withheld that they need a check, we cut that check and it’s not an increase in their tax burden? Wow…. just wow.

What’s most remarkable is the counter-stimulus that this policy will have on Wisconsin’s anemic economic recovery under Walker.  A quick economic lesson: Poor people spend tax refunds.  They spend them all.  The poorer you are, the higher your MPC (Marginal Propensity to Consume).   Poor people are much more likely to spend these kinds of tax refunds.  Tax cuts are more stimulative the lower you are on the socio-economic scale.  In general, rich people save while poor people spend.  Right now, we need more spenders than savers.

While Wisconsin burns, Walker continues to provide his crony capitalist campaign donors massive tax breaks.  Tax breaks to people who seem incapable of creating jobs.

 Welcome to hell.

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1 thought on “Scott Walker’s War on Poverty

  1. Sorry, but raising taxes needs to be ended for businessess and high income familes. I dont make that much money therefore I dont pay much in taxes. In fact I will freely state that I made less then $30,000 last year and I only paid 5% to the feds. For many people I work for (I own a lawn care service) they pay 30-35% in federal taxes plus state taxes putting them to the 50% bracket. These are the people that buy goods and services from us, people that employ us and fund us. Any money we tax out of them they they simply wont spend on other things to keep our economy going. Its not right and its unfair. If you want fair, go the the flat tax, not the progressive.

    Also, you can blame Scott walker all you want. I also go to UWS and people are bitching on how we dont get proper funding yet we have two brand new state of the art buildings, we are still doing new constuction, and I have all the resources I could ever need.

    I’m not rich nor do I claim to be rich, but its time to take responsiblity and have the middle class step up and pay there fair share.

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