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National group: Wisconsin one of few states to raise taxes on poor in 2012


MADISON, WI (WTAQ) - A national think tank says Wisconsin is one of the few states that will raise taxes on the poor next year.

The new state budget will reduce the amount of the state’s earned income tax credit for families with 2-or-more children.

Those families will get $56 million less in their tax refunds a year from now – and the Center on Budget and Policy Priorities says it makes Wisconsin one of just a handful of states that are essentially raising taxes on their poorest residents.

When Governor Scott Walker proposed the cut, he said it was not a tax increase. That’s because most people who get the credit don’t make enough to pay state income taxes.

But Jon Peacock of the Wisconsin Council on Children and Families says many people who get the earned income credit do make enough.

He tells the Appleton Post-Crescent that a two-parent family of 4 which makes $32,500 a year will get an $81 reduction in their credit next year. The cut is partially off-set by an expanded earned income credit at the federal level.

It was part of the stimulus package in 2009. But the benefit expires at the end of next year, and Peacock says it will be a double hit for Wisconsin’s low-income families.