Pages tagged "Family Economic Security News"
Similar to Kansas's failed tax experiment, Senate Bill 335 puts West Virginia on a path to eliminate the state's personal and corporate income taxes, reduce severance taxes, and replace with them with a broad-base sales tax that would be the highest in the nation. In Kansas, this has resulted in an ongoing fiscal crisis that has forced cuts to schools and other services people rely on every day, without the promised economic benefit. Kansas legislators are now trying to reverse course.
SB 335 would dramatically increase taxes on low-income populations and the middle-class to pay for large tax breaks for the richest West Virginians. If enacted, it would be the largest redistribution of wealth in the state in the last century.
Cutting the state income tax and replacing only some of the lost revenue with higher sales taxes will have immediate and harmful effects on our state. Instead of growing our economy, it is almost certain to lead to deep cuts in investments in schools, roads, and other critical building blocks of strong economy - similar to what happened in Kansas.
SB 335 will also reduce what people spend in local stores, slowing the state's economic growth and job creation. A higher sales tax makes the price of everything that is subject to a tax go up, and that is likely to reduce spending at local businesses. When they can, people will instead cross the border or buy from out-of-state Internet merchants who don't charge sales tax or charge a lower rate, causing West Virginia small businesses to layoff workers.
Businesses will also face higher sales taxes that will eliminate a portion of any savings from the income tax cuts. A substantial share of business purchases - such as electricity, heat, water, machinery, equipment, computers, furniture, and shipping supplies - will now be taxed at eight percent, hurting West Virginia small businesses by adding thousands of dollars in annual expenses.
Our tourism industry will suffer as the state lodging tax increases to 11 percent. Combined with the six percent local hotel occupancy tax, West Virginia would have the highest lodging tax in the nation.
Because the increased sales tax revenue is unlikely to fully replace the lost income tax revenue, the state will very likely have to cut back on funding for schools and other services provided at the local level, and local governments, in turn, likely will increase business taxes to make up some of the difference.
The idea that economists agree that taxing consumption is better for economic growth than taxing income is just not true. There is no consensus among economists that shifting from reliance on state income taxes to sales taxes would improve state economic growth.
For Immediate ReleaseContact: Linda Frame
National "fintech" charter opens door to predatory payday lendingThe PaydayFreeLandia coalition, representing 15 states , plus the District of Columbia, demanded today that the Office of the Comptroller of the Currency (OCC) back off a dangerous plan that would gut their states' strong consumer protection laws. In a detailed letter submitted today to the national banks regulator, the coalition joined more than 270 community, labor, civil rights, faith-based, and military and veterans groups to strongly oppose the OCC's recent action to offer a federal charter to technology, or "fintech," companies that market financial products and services online. The groups called on the OCC to withdraw its action immediately, because the fintech charter would allow payday lenders and other predatory companies to circumvent their hard-won and fiercely-defended state consumer protections.
The PaydayFreeLandia coalition, which represents the wide swath of the U.S. where predatory payday lending is legally prohibited, released the following statement:
"The OCC's action is deeply alarming to all who care about responsible lending and the right and responsibility of states to protect their residents and oversee commerce within their borders. The OCC's federal fintech charter recklessly endangers working families, people and communities of color, older Americans, and others who are targeted by predatory payday lenders and their ilk. This charter would be disastrous for our states and we call on the OCC to withdraw it immediately.
"Over 90 million Americans – more than one third of the country – live in jurisdictions where payday lending is illegal. Thanks to our states' consumer protection laws, we save billions of dollars each year in predatory payday loan fees that trap people in long-term, devastating cycles of debt. Our states' residents avoid the economic fallout that payday lending inflicts on borrowers – excessive overdrafts, unpaid bills, closed bank accounts, bankruptcies. The average payday loan borrower has 10 loans per year at 400% interest. People in our states are significantly better off and address financial shortfalls in ways that don't lead to these abusive debt traps.
"The OCC charter throws the door to the hen house wide open for the payday loan foxes that have long sought to dig their way into our states. Indeed most of our states have never permitted payday lending, but several, like South Dakota – where citizens overwhelmingly voted in favor of a 36% interest rate cap this past November– have moved to expel financial predators from their borders. We have had to wage intensive campaigns against the payday loan industry to secure and defend our states' vital consumer protections, both in our legislative houses and at the ballot box, and we intend to keep payday lending out of our states."
The changes would extend overtime pay to full-time, salaried employees netting less than $913 a week, or $47,476 yearly. Additionally, the rules make it mandatory the threshold be updated every three years.
The Fair Labor Standards Acts defines overtime as any hours worked beyond a 40 per week and calls for employees to be paid time and a half of their regular pay rate.
The current threshold has not kept pace with inflation. "In 1975, the overtime salary threshold covered about 62 percent of all salaried workers, compared to just 8 percent today," wrote Sean O'Leary, senior policy analysts at West Virginia Center on Budget and Policy.
He explained had the threshold kept pace with inflation over the last four decades, it would be about $52,000 annually today. "The proposed threshold largely restores its lost value," he said.
Regulations for the federal Supplemental Nutrition Assistance Program do not allow for blanket exemptions based on homelessness, said Allison Adler, a spokeswoman for the state Department of Health and Human Resources.
A spokesman for the U.S. Department of Agriculture, which oversees SNAP, confirmed that homelessness is not cause for exemption but can be an indication that a person is "unfit" for work and thus is not required to.
The DHHR told the Gazette-Mail in June it planned to exempt residents of homeless shelters and those who don't stay at the same place for more than 90 days.
Starting Oct. 1, the state's policy will say exemptions for the chronically homeless will be considered on a case-by-case basis, Adler said.
The Mountain State ranked low in employment fraud complaints per capita and bank fraud complaints per capita, coming in fourth least in both, according to the Identity Theft Resource Center's Data Breach Report.
Key findings in the survey found:
• In 2015 the most common identity fraud complaint in West Virginia was government documents/benefits fraud. Other types of fraud, including credit card fraud and bank fraud, were reported at a much lower rate than the national average.
• There were just 80 identity theft complaints per 100,000 residents in West Virginia in 2015. This includes 41 government documents/benefits fraud complaints and 11 credit card fraud complaints per 100,000 residents.
The economics of West Virginia may help explain the ranking. Employment fraud could rank low because the state has the lowest civilian workforce population rate and one of the highest jobless benefit claims in the United States.
A large number of West Virginians also do not have either a banking or credit union account. In a 2013 report, The West Virginia Center on Budget and Policy found 791 out of every 1,000 West Virginians are either unbanked or underbanked.
Yesterday's forum, the second of six, was held at the University of Charleston and included panelists from mental health, education and legal backgrounds. During the forum, panelists discussed West Virginia's lack of funds for mental and behavioral health intervention, a lack of coordination of services and the statewide deficit of therapists and counselors.
Panelists called on legislators to aggressively fund existing mental health services – especially in schools – citing West Virginia's high youth confinement rate as an example of the state's failure to help those in need. Over the last 16 years, youth confinement has declined in almost every state except West Virginia, where the confinement rate has grown by almost 50 percent, according to a Mental Health Matters press release. West Virginia has the second highest youth incarceration rate in the nation.
The Clarksburg area is only a little below that, with a poverty rate of around 15 percent.
This is statistically unchanged since the recession in 2008, according to Sean O'Leary, senior policy analyst for the West Virginia Center on Budget and Policy.
"Poverty numbers went up during the recession and stayed at that level," O'Leary said, pointing to income stagnation as one of the contributing factors.
West Virginia's median household income was an estimated $42,019 in 2015, the third lowest of all 50 states. The median household income in Clarksburg was $46,903.
One solution to the poverty problem could be the introduction of a refundable state earned income tax credit, or EITC, according to Seth DiStefano, a campaign coordinator for the West Virginia Center on Budget and Policy.
For Immediate ReleaseContact Seth DiStefano or Sean O'Leary
(Charleston, WV) Too many West Virginians struggled to make ends meet in 2015, so West Virginia needs to take immediate action to pass a state Earned Income Tax Credit which would make it easier for people to build a secure future. PDF of news release.
Nearly one in five West Virginians struggled to afford basic necessities in 2015, with a family of four too often living on less than $24,000 a year. Almost one in four West Virginia children are growing up in families that can't afford the basics necessary for a good start to life because they make so little.
The number of people struggling economically remains too high and is holding back our economy and hampering our kids' futures.
"A West Virginia working families tax credit would open the doors of opportunity for these people by helping them keep more of the money they earn while working at low-wage jobs," stated Seth DiStefano, State EITC Campaign Coordinator with the West Virginia Center on Budget and Policy. "Our state will be a better place when all West Virginians have the opportunity to build a better life for themselves and their kids. A West Virginia Earned Income Tax Credit is a big part of making this a reality."
A state earned income tax credit, set at 15% of the federal credit, would supplement the existing federal earned income tax credit and benefit 158,000 working West Virginia families. It would provide an average credit of $332 a year to those families and put $52 million back into local economies in West Virginia. Twenty-six other states and the District of Columbia already have a state earned income tax credit.
West Virginia highlights from the 2015 American Community Survey include the following:
- An estimated 321,583 West Virginians lived in poverty in 2015, for a total poverty rate of 17.9 percent. The state's poverty rate remains statistically unchanged since the recession. West Virginia has the 7th highest poverty rate among the 50 states.
- West Virginia's child poverty rate in 2015 was 24.6 percent, with no statistical difference from 2014. An estimated 90,727 children lived in poverty in 2015. West Virginia had the 7th highest child poverty rate among the 50 states.
- Poverty is much worse for African Americans in West Virginia. The state's poverty rate for African Americans was 28.4 percent in 2015.
- Seniors in West Virginia are less likely to be in poverty than the rest of the state. The state's senior poverty rate in 2015 was 8.5 percent, roughly half of the state's total poverty rate. An estimated 27,957 West Virginians over the age of 65 living in poverty.
- Poverty rates decrease for adults with higher levels of education. In 2015, the poverty rate for West Virginians with at least a bachelor's degree was 4.1 percent, while it was 15.6 percent for those with just a high school diploma. Poverty was highest among those who did not graduate from high school, at 28.9 percent.
- Women in West Virginia face higher poverty rates than men. In 2015, West Virginia's poverty rate for women was 19.7 percent, compared to 16.1 percent for men.
- Unemployed West Virginians are five times more likely to be living in poverty as employed West Virginians. In 2015 the poverty rate for employed West Virginians was 7.8 percent, while it was 40.2 percent for the unemployed.
- West Virginia's median household income was an estimated $42,019 in 2015. Median household income measures the income of the typical household – or the household in the middle of the income distribution – and serves as a good indicator for how the middle class is faring. West Virginia's median household income did mot increase in the past year, but has increased since 2011. In 2015, West Virginia has the 3rd lowest median household income among the 50 states.
|Poverty Rate||Median Household Income|
|Beckley, WV Metro Area||18.0%||$37,101|
|Bluefield, WV-VA Micro Area||17.9%||$37,965|
|Charleston, WV Metro Area||18.6%||$42,526|
|Clarksburg, WV Micro Area||15.0%||$46,903|
|Huntington-Ashland, WV-KY-OH Metro Area||20.1%||$42,237|
|Morgantown, WV Metro Area||20.3%||$45,941|
|Parkersburg-Vienna, WV Metro Area||17.3%||$40,547|
|Weirton-Steubenville, WV-OH Metro Area||16.0%||$43,452|
|Wheeling, WV-OH Metro Area||11.7%||$47,726|
|West Virginia - Statewide||17.9%||$42,019|
The West Virginia Center on Budget and Policy on Tuesday in a release credited the decrease to health care reform, especially Medicaid expansion.
The data shows 108,000 West Virginians lacked health insurance in 2015, down from 156,000 in 2014, making the state's uninsured rate 6 percent. In 2014, the uninsured rate was 8.6 percent, and before the Affordable Care Act was fully implemented in 2013, the rate was 14 percent. Now 94 percent of West Virginians are insured.