The document summarizes trends in poverty and inequality in the United States and Wisconsin, and how recent tax policy choices have exacerbated economic disparities. It discusses how safety net programs have reduced poverty but are underfunded and work against economic forces that increase poverty and inequality. Specifically, it outlines how Wisconsin's 2011-2013 and 2013-2015 state budgets cut taxes for the wealthy while raising taxes on low-income households through reducing tax credits. The presentation concludes that speaking out can help counter these policies and their negative impacts.

1. The Collision between the War on
Poverty and Recent Tax Policy Choices
For the Grassroots Northshore webinar series
January 23, 2014
Jon Peacock, project director (jpeacock@wccf.org)
Wisconsin Budget Project
Wisconsin Council on Children and Families

2. Housekeeping
Participants are on mute to avoid feedback
You will be able to ask questions later using the
chat tool in the lower left corner of the screen.
To use the tool, type your message and then
use the return key to send it.

3. Agenda
Trends in poverty and inequality, and
the role of safety net programs
The role of tax policy choices in
exacerbating inequality
What we can do
3

4. % Poverty Over Time: 1959-2010
Children and Seniors
Sachs JD. The Price of Civilization. 2011, Random House, NY. Chapter 10, pp. 185-208

5. Two Measures of Poverty

6. Effectiveness of Safety Net Programs

7. Unequal Growth Since about 1980

8. Rising Income Inequality in WI

9. Tax Increases in the 2011-13 Budget
for Low-income Households
While cutting taxes for the wealthy, the 2011-13 budget
raised taxes on low-income households by:
 Cutting the state Earned Income Tax Credit (EITC), which is
now worth $121 less for a single mom with two kids who
makes $23,000 per year; and
 Ending the practice of annually adjusting the formula for
the Homestead tax credit for inflation – which means the
credit will be about $170 less in 2015 than it was worth in 2011
for an elderly person with a Social Security income of about
$15,000 per year (growing by an average of 2.5% per year).

10. Effects of the Income Tax Cuts
in the 2013-15 Budget

11. Effects of the Income Tax Cuts
in the 2013-15 Budget (cont.)

12. Effect of Increasing Sales Tax to Pay
for Elimination of Income Tax

13. Takeaways
Antipoverty programs do work, but they are
underfunded, and have to work against an economic
tide creating more poverty and inequality.
The forces behind that opposing tide include a variety
of public policy choices, including state-level tax policy
decisions.
We can make a difference by speaking out (e.g., letters
to the editor, social media, contacting legislators)

14. Follow WCCF
WCCF Website: www.wccf.org
Facebook: https://www.facebook.com/wiskids
Follow us on Twitter: https://twitter.com/wiskids
Kids Count Data Center: http://datacenter.kidscount.org/
WCCF Blog: http://www.wiskids.blogspot.com/
Wisconsin Budget Project: http://www.wisconsinbudgetproject.org/
Budget Project blog:
http://www.wisconsinbudgetproject.org/category/blog
Jon Peacock (jpeacock@wccf.org)
555 West Washington Avenue, Suite 200
Madison WI 53703
608-284-0580
14

15. Upcoming Webinars
Tune in for more webinars at this time each Thursday.
For information about upcoming and past webinars,
go to: www.grassrootsnorthshore.com
This presentation will be posted there in a few days,
and also at www.wisconsinbudgetproject.org