March 27, 2007
Oregon's Income Taxes on Working Poor and Near Poor Among Highest in the Nation

Oregon Center for Public Policy:

Working Oregonians who are poor or near-poor pay high state income taxes compared to their counterparts in other states, according to a report released today by the Washington, D.C.-based Center on Budget and Policy Priorities and the Oregon Center for Public Policy.

Oregon is one of only 19 states that levy an income tax on two-parent families of four living in poverty and one of only 15 states that levy an income tax on a single-parent family of three with income at the poverty level.

"Oregon should be making work pay, not pushing poor working families deeper into poverty," said Michael Leachman, policy analyst at the Oregon Center for Public Policy (OCPP).

The same size family earning 25 percent more than poverty level wages, or $25,769, will pay about $832 in state income taxes, the third highest income taxes in the country for low income families.

The income tax on low-income families of three at 125 percent of poverty for the 2006 tax year is $511, also the third highest in the nation.

"The most targeted way to eliminate income taxes on poor working families is by increasing the state Earned Income Credit.

The national report released today focuses on the income taxes paid by poor and near poor families, but states have other taxes that can disproportionately impact the poor.

Posted on March 27, 2007 03:34 PM