Is It Working for Children in Working Class Families?

Home 9 Tax and Budget 9 Is It Working for Children in Working Class Families?

What do low-income families need to thrive economically? For starters, they need jobs, a way to get to those jobs, and health care that enables them to hold onto those jobs and be productive workers. They also need a tax code that helps families make the climb to the middle class.

Unfortunately, actions by state policymakers have made it more difficult for parents in working-class families to build better lives for themselves and their children.

Wisconsin has lagged other states in job creation, in part due to big cuts in support for schools and local governments. Between March 2011 and March 2012, Wisconsin lost nearly 24,000 jobs – the worst performance by far of any state. The bulk of these lost jobs were in the public sector. As for the 250,000 private sector new jobs pledged by Governor Walker, that will take more than 50 years to happen at the current pace.Parents who have jobs are having a harder time getting to work, as a result of decisions made by the Governor and Legislature. Cities like Racine  and Wausau have been forced to raise bus fares and cut routes due to reduced state support for public transportation and local governments in general.

Many low-wage workers are also going to pay more for their health care or lose their health insurance, thanks to changes to BadgerCare  that take effect on July 1, 2012. For example, those changes will cost a family of four making $32,500 per year more than $1,100 annually (and up to $1,600 more than that in 2013 if federal officials approved an increase in copays sought by the Walker Administration). Based on DHS figures, it appears that the changes will cause at least 17,000 parents to lose their BadgerCare coverage.

In addition, working class families are paying more in income taxes. That’s because the Legislature made deep cuts to a tax credit for working class families with children (Earned Income Tax Credit), while reducing taxes for corporations and big earners. The result is that more than 140,000 working families in Wisconsin get less money back when they file their tax returns – up to $500 less. More than one out of four Wisconsin children lives in a family that is affected by the cut in the tax credit.

Working class families are also paying more in property taxes – $14 million more over two years, thanks to the Legislature’s decision to effectively freeze the Homestead property tax credit.

Low-income families in Wisconsin already paid a higher percentage of their income in state and local taxes than higher-income taxpayers did. With the cuts in tax credits, that gap has widened.

Job loss, reduced access to jobs and health care, and tax hikes for working class families – this isn’t a recipe for success for working class families. If we want to help children and families succeed, we need to roll back these changes, stop short-changing our present, and start investing in the future.

Tamarine Cornelius
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Over the past year, the Wisconsin state government has made a number of decisions that reflect a significant directional shift in our approach to the well-being of children and families. We have seen our public investments in education, environmental protection, and a variety of social services shrink dramatically. Our tax structure has shifted as well, providing more breaks for corporations and the wealthy at the same time as credits for lower-income residents have been scaled back. This is one in a series of blog posts examining some of those changes and the impact they are having on Wisconsin’s children and families. We hope voters will keep them in mind as they make their decisions this election season, and will urge candidates to talk more about these issues in the weeks leading up to the elections.

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