How Tax Policy Can Help Colorado Families
By Ali Mickelson, director of legislative and tax policy
On Labor Day, we published new research about the state of low-wage employment in Colorado. The main takeaway from that report is that about 25 percent of Colorado workers are still struggling to make ends meet as wages remain low and median income actually decreased over the last 20 years. This is especially true for people of color and women because they’re more likely to be employed in low-wage jobs.
While that research showed increases in the state minimum wage have helped, there remains more we can do to boost incomes for people who have a hard time paying the rent, putting food on the table for their families, or affording other basic needs. What tangible policy changes help people working low-wage jobs support their families and obtain economic security? A recent report from the Center on Budget and Policy Priorities (CBPP) offers one solution.
CBPP argues for the passage of the Working Family Tax Relief Act, a bill CFI supports that is sponsored by Senators including Colorado’s Michael Bennet. The Working Family Tax Relief Act would increase the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC), raising the incomes for tens of millions of families across the country.
Many of the workers in these families are employed in jobs which, while important to our economy and way of life, tend pay low wages. CBPP breaks out how many workers by occupation would benefit from the Working Family Tax Relief Act. Cashiers, retail salespersons, customer service representatives, and restaurant waitstaff would be the top occupations who would benefit. Put together, over 250,000 Colorado workers would see their incomes rise if the bill became law.
CBPP also found that the Working Family Tax Relief Act would increase incomes for millions of families whether they are Black, white, or Brown. That includes 24 million white households, 9 million Latinx households, 8 million Black households, 2 million Asian households, and roughly half a million American Indian and Alaska Native households. CBPP also notes that “white households constitute the greatest number of those benefiting because they’re the largest share of the population, but the bill would help a greater share of Black, Latino, and other households of color because they are over-represented in low-wage jobs due to long-standing racial barriers to economic opportunity.” That analysis mirrors the findings in our low-wage worker report.
The Working Family Tax Relief Act highlights the value of using tax policy to offset the racial and fiscal inequities in our economy. Policies like increasing the EITC and the CTC put money back into the pockets of the workers who do some of the most important jobs yet receive the lowest pay. Colorado lawmakers also have the ability to expand and fund these kinds of policies at the state level.
Locally, CFI will continue to advocate for tax policy that lifts up and supports Colorado families who rely on low-wage jobs to make ends meet. Expect to hear more when the legislative session begins in January.
