Combating Poverty with Tax Policy
By Ali Mickelson
With such a high number of Americans living in poverty, the tax code is a key anti-poverty tool that Colorado lawmakers can put to good use. A recent report by the Institute of Taxation and Economic Policy (ITEP), a non-partisan research group, discusses different ways that states are using their tax system to combat poverty.
Some of the key steps recommended by ITEP include creating a state-level Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), which help working families make ends meet; providing property tax rebates to low-income homeowners and renters; and creating tax credits that help relieve the disproportionate impact of sales and property taxes on low-income households.
Colorado’s triggered reinstatement of the EITC and CTC is recognized in the report as a move forward in state anti-poverty tax policy. However, opportunities still remain. Colorado needs to make the EITC and CTC permanent and fully fund them for the long-term. The state should also look at creating low-income housing incentives and additional credits targeted at low-income families.
For the full report and more information on anti-poverty tax policies, please click here.
