Wisconsin families who live in rural counties are the most likely to benefit from the state Earned Income Tax Credit (EITC), according to a new report from the Wisconsin Budget Project.
The EITC provides a huge boost for Wisconsin’s rural economy and acts as an important resource for working families battling to stay out of poverty. More than 15% of people living in rural areas of Wisconsin benefit from the EITC, compared to 13.6% of people living in metropolitan counties (those with an urban core of at least 50,000 people), and 13.2% of people living in micropolitan counties (those with an urban core of between 10,000 and 50,000 people). Nine of the ten counties with the largest percentage of residents receiving the EITC are rural. The map below shows counties with the highest share of families receiving the credit.
Taxpayers in rural counties received $24.1 million in tax relief from Wisconsin’s EITC. More than 113,000 children in rural areas lived in families that received the EITC in tax year 2011. Statewide, families received $100.8 million in credits from the state EITC in 2011.
The EITC is a critical resource for rural families, but the credit is also a vital support for many working families in urban areas, including those who live in Milwaukee County. Nearly one out of every five people in Milwaukee County benefits from the EITC, and the credit pumped more than $27 million into the economy in Milwaukee County in 2011. The deep cuts the Legislature made in the EITC in the 2011-13 budget cost Milwaukee working families $7.7 million when they filed their 2011 tax returns. (For more on the importance of the EITC to Milwaukee working families, you can read this December 27th blog post, or go straight to the original report by UW-Milwaukee Employment and Training Institute.)
Given the importance of the EITC to rural and Milwaukee County families, legislators should make it a top priority to reverse the cuts made to the EITC in 2011. Undoing those cuts would reduce taxes for the state’s most vulnerable families.