5 States That Tax The Poor The Most

MSNBC
In an effort to help families work their way out of poverty, most of the United States do not tax the incomes of working-poor families. A handful of states do, however.

1. Alabama

Alabama is one of the country’s poorest states, and it taxes its poor residents’ incomes the most. The state has a poverty rate of 17.4 percent, which is among the nation’s highest. It also has the fifth-lowest median household income. A family of four at the poverty line must pay $548 in income taxes. This amount has consistently increased since 1994. Additionally, Alabama has the second-lowest tax threshold in the country. A single-parent family of three making $9,800 -- or 55 percent of the group’s poverty level of $17,922 -- remains subject to income tax.

2. Illinois

Illinois taxes families of four making 57 percent of the poverty level. This means that a family earning $13,100 a year must pay income tax. Due to state fiscal issues, Illinois raised its flat income tax rate from 3 percent to 5 percent in 2011. This caused income taxes for a family of four at the poverty line to increase by $322. However, the state plans to fully implement tax credits for low-income families by 2013, which “will almost completely offset the impact of the income tax increase for poor families,” according to CBPP.

3. Hawaii

Hawaii has a particularly low poverty rate of 10 percent. It also has one of the highest median household incomes in the country. The state continues to tax families at the poverty line at one of the highest rates in the country. However, the amount a family of four at the poverty line pays in income tax has decreased since 1994. That year, the amount was $406. Today, it is $331. The state also taxes families making 77 percent of the poverty line or more.

4. Oregon

A family of four in Oregon living at the poverty line pays the fourth-most taxes in the country at $274. For a family that size making 125 percent of the poverty line, the amount of tax owed jumps to $869 -- the third most in the country. State lawmakers have considered extending tax breaks for low-income households in recent years, but significant action has not yet taken place.

5. Georgia

Georgia has among the highest rates of residents living below the poverty line in the country. It also has the fourth-lowest tax threshold in the county. Families making just 69 percent of the poverty line or more are taxed. For those low-income families, taxes are generally getting worse. The amount that a family of four living on the poverty line must pay in income tax has more than doubled since 1994, from $116 to $273. More...