Gov. Walker’s Budget Proposes Millions In Cuts To Tax Credits For Low-Income Families And Seniors

Much of the attention paid to Gov. Scott Walker (R-WI) is deservedly focused on his attempt to legislatively bust unions by stripping public employees of their right to collectively bargain. However, the budget that Walker released last week contains a host of problematic policy proposals that adversely affect women, students, and Wisconsin’s low-income residents.

For instance, his budget repeals a law requiring insurance companies to cover prescription birth control and eliminates a program providing health services to uninsured women. He’s also proposed more than $900 million in cuts to Wisconsin’s public schools. Adding insult to injury, Walker’s budget codifies his intention to cut the state’s Earned Income Tax Credit, which goes to aid the state’s poorest residents. The non-partisan Wisconsin Taxpayer’s Alliance ran the numbers:

Walker proposes cutting about $16 million a year from the program, which in 2009 paid 273,939 low-income Wisconsin residents a total of $133 million.

Under Walker’s proposed biennial budget, a single mother with two children earning about minimum wage — $15,000 a year — would lose $302 of her $704 Earned Income Tax Credit next year, according to estimates from the nonpartisan Wisconsin Taxpayers Alliance. A two-parent household with two children earning $30,000 a year would see its tax credit cut by $194 to $258, the alliance said.

In an interview last Friday, Walker derided the EITC as a “redistribution program” that involves “taking money from other taxpayers and giving it to individuals who have a limited tax liability.” However, the EITC is a proven anti-poverty measure that has enjoyed bi-partisan support in the state. “Cutting the EITC is essentially the same as raising taxes on low-income working families. Wisconsin’s credit was designed to lift the families of low-wage workers above the federal poverty level,” wrote the Wisconsin Budget Project’s Jon Peacock.

Citizens for Tax Justice added that cutting the EITC now, as the country still grapples with the effects of the Great Recession, amounts to “kicking these vulnerable families while they’re down”:

Millions of Americans are experiencing reduced work hours and wages, or are without a job at all, as a result of the lingering economic downturn. This means that more families are in need of the additional income assistance the credit provides to help pay for food, housing, transportation, and other necessities.

Walker has also proposed cutting cutting $9 million “in tax rebates to low-income homeowners under the Homestead Tax Credit.” These credits are designed to “offset the cost of property taxes for residents earning no more than $24,500 a year, many of them elderly.”