In addition to seeking a higher minimum wage, Speaker Sheldon Silver announced this week that the Assembly will seek to reduce state taxes on the working poor. Specifically, Silver said:
Under our plan, working families who earn less than $30,000 annually will see their income taxes cut. Working families who earn less that $25,000 will pay no taxes at all.
But this is a solution to a non-existent problem. The working families described by Silver already pay no income tax, thanks to New York’s exceptionally (and appropriately) generous Earned Income Tax Credit (EITC). As documented in a recent report by the Center on Budget and Policy Priorities, a family of three pays no income tax until its income exceeds $34,600, and a two-parent family of four pays none until income exceeds $40,300.
At a poverty level income of $17,374, a single parent of two children gets a refund of $1,917 due to the EITC. At a minimum wage annual income of $15,080, a two-parent family of four gets a refund of $2,109 — in effect raising its annual income to $17,189.
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