Tax report on La.: Some good, some bad

A surprising number of states taxed working-poor families deeper into poverty last year, according to a new report from the Center on Budget and Policy Priorities. Others, meanwhile, made giant strides in relieving such families of tax burdens in 2008. As for Louisiana, the nonpartisan research group’s latest report points to both positives and negatives. For instance, Louisiana is among the 16 states that taxed working-poor, married couples with two children in 2008. “Undermining families’ efforts to work their way out of poverty is never a good idea,” said Phil Oliff, the report’s co-author. “But it’s especially harmful in the current recession, when people are already struggling just to get by.” The report measures the “tax threshold” in each state—meaning the income level at which families begin owing income taxes. In Louisiana, the threshold for two-parent families of four was $20,300, well below the $22,017 national poverty line for 2008. On the other hand, the report notes Louisiana implemented an Earned Income Tax Credit at 3.5% of the federal credit. The report suggests the EITC significantly increased Louisiana’s threshold in 2008 and cut poor families’ income tax liability by more than half compared to 2007. But overall, the nonprofit concludes that the state still has a ways to go. “While these changes were a major improvement, Louisiana still imposed the 15th highest income taxes in the nation on families of four with income at the poverty line in 2008,” the report states.—Jeremy Alford