Brown Pushes Working Families Tax Relief Act, as Reports Show Income Inequality on the Rise

ICYMI: Recent Washington Post & Columbus Dispatch Reports Show Growing Income Gap in Ohio and Across the Country; Sen. Brown’s Working Families Tax Relief Act would Put Money back in Pockets of Hardworking Americans

WASHINGTON, D.C. – In case you missed it, recent reports from the Washington Post and Columbus Dispatch have shown that income inequality is on the rise in Ohio and across the country. The Washington Post reported last week that income inequality in America is at the highest it’s been since the Census Bureau started tracking income inequality data in 1967. According to the Post, the separation between the rich and poor is at a five-decade high, despite recent reports of economic growth in the U.S. The Columbus Dispatch also reported last week that while Ohio’s median household income increased slightly last year, the divide between white and black households continued growing.

These reports show something must be done to reduce the growing gap in income inequality. U.S. Senator Sherrod Brown (D-OH) is continuing to take action and push his Working Families Tax Relief Act, which would cut taxes for workers and families by expanding the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC).

“All across the country, families are working harder than ever but have less and less to show for it. Corporate profits have soared, executive compensation has exploded, but wages are flat. Meanwhile the cost of everything from healthcare to education and housing is up,” said Brown. “Our bill would help put more money back in the pockets of working families and set children up for future success.”

Brown introduced legislation earlier this year to help bridge the gap in income inequality and put more money back into the pockets of workers and families. The EITC and CTC are two of the most effective tools we have to put money in the pockets of working people and pull children out of poverty. The Working Families Tax Relief Act would also allow workers to draw a $500 advance payment on their EITC so that families aren’t forced to turn to predatory payday lenders when the car breaks down or other unexpected expenses come up.  Payday loans are generally made to individuals who are working and often eligible for the EITC. The average payday loan is about $375. 

Read more about Brown’s Working Families Tax Relief Act here.

 A Center on Budget and Policy Priorities (CBPP) report found Brown’s legislation would benefit over 8 million women of color, including more than one-third of Black, Latina, and Native American women.

The Washington Post story can be found here and below:

Washington Post: Income inequality in America is the highest it’s been since Census Bureau started tracking it, data shows 

By: Taylor Telford

September 26, 2019

Income inequality in the United States has hit its highest level since the Census Bureau started tracking it more than five decades ago, according to data released Thursday, even as the nation’s poverty and unemployment rates are at historic lows.

The gulf is starkest in wealthy regions along both coasts such as New York, Connecticut, California and Washington, D.C., as well as in areas with widespread poverty, such as Puerto Rico and Louisiana. Equality was highest in Utah, Alaska and Iowa.

And while the nation is in the midst of its longest economic expansion, nine states saw spikes in inequality from 2017 to 2018: Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas and Virginia.

The Gini index measures wealth distribution across a population, with zero representing total equality and 1 representing total inequality, where all wealth is concentrated in a single household. The indicator has been rising steadily for several decades. When the Census Bureau began studying income inequality in 1967, the Gini index was 0.397. In 2018, it climbed to 0.485.

By comparison, no European nation had a score greater than 0.38 last year.

The federal minimum wage has stood at $7.25 for more than a decade. That’s one of the biggest reasons the gap between the rich and poor is widening, said Brielle Bryan, an assistant professor of sociology at Rice University.

“Inequality will go up as long as the people at the top of the tail are seeing their wealth increase,” Bryan said. “A booming economy means that people who have higher income and own capital are able to see continued higher returns on that.”

Recent economic gains by lower-income workers who have found jobs and benefited from minimum-wage increases in many states haven’t made up for the long-running trend of the wealthy seeing far larger income growth than middle- or lower-income earners. The number of families earning $15,000 or less has fallen since 2007, according to the latest census data, while the number of households bringing in $250,000 a year or more has grown more than 15 percent.

Though the gap between the richest and poorest expanded, the nation’s median household income topped $63,000 for the first time. However, after adjusting for inflation, it’s roughly the same as it was 20 years ago.

The persistent rise in inequality has become a central topic in the 2020 presidential race, with candidates like Bernie Sanders and Elizabeth Warren calling for a wealth tax. This week, Sanders unveiled a proposal that would impose a tax as high as 8 percent on the ultrawealthy, raising $4.35 trillion over a decade, according to an analysis by economists who consulted with the Warren and Sanders campaigns.

“There should be no billionaires,” Sanders tweeted when he announced his plan. “We are going to tax their extreme wealth and invest in working people.”

Systemic inequality is actually starkest in the top tier of the economic ladder, which is populated primarily by white men, Bryan said. Women in the 95th percentile of earners make around 68 cents on the dollar compared with their male counterparts.

“We don’t have as much sympathy for CEOs,” Bryan said, “but what’s happening at the top end is really symbolic of problems happening throughout the system.”

The Columbus Dispatch story can be found here and below:

Columbus Dispatch: Ohio still lags US in household income as inequality between whites and blacks grows, census finds 

By: Mark Ferenchik and Rita Price

September 26, 2019

New numbers from the U.S. Census Bureau show Ohio’s median household income increasing slightly last year to a little more than $56,000, but that figure is still nearly 10% lower than the U.S. median. Overall income inequality also grew in the nation, state and in Franklin County, especially between black households and whites.

The median household income increased slightly last year in Ohio — nudging past $56,000 annually — but still sits well below the U.S. median, according to a new U.S. Census Bureau survey that also shows income inequality increasing here and nationwide.

Advocates for workers say the data show that low unemployment rates aren’t driving up wages and improving lives as much as hoped.

In Franklin County, where the population and economy continued to boom in 2018, annual incomes for African American and all county households fell slightly compared to 2017. The overall income inequality gap grew modestly as well.

“It shows that growth for growth’s sake doesn’t work,” said Hannah Halbert, a researcher for the left-leaning Policy Matters Ohio.

The haves and the have-nots in America have been steadily growing apart, said Alex Fischer, president and CEO of the Columbus Partnership, a civic organization of Columbus’ top business leaders. “We’re not immune to that,” he said.

Franklin County’s annual median household income, adjusted for inflation, was $60,373 in 2018, down slightly from $60,453 in 2017.

The state’s inflation-adjusted median household income rose from $55,139 in 2017 to $56,111 in 2018. That’s 9.4% lower than the U.S. median of $61,937. Ohio also has higher levels of income inequality than most states, and the divide runs deepest between black and white households.

The annual median household income for whites in Franklin County, for example, rose from $69,735 in 2017 to $70,400 in 2018. But for African-American households, it dipped from $38,587 to $37,464 — about 53% of white household incomes.

John Coats II, the vice president of the Columbus NAACP, wasn’t surprised. “That disparity has been in place in Franklin County,” he said.

Many of the area’s low-wage workers are minorities and women, and their paychecks barely keep them afloat.

Ana Matias, a housekeeper at the Greater Columbus Convention Center, said she feels stuck. After more than a decade, the East Side resident earns about $11.50 an hour. If she were to pick up another job or get a significant raise, she would lose the subsidy that keeps her share of the rent manageable.

“I want to earn more, but they don’t allow you to have two jobs,” said Matias, 59. “That keeps you poor.”

Michael Wilkos, senior vice president of community engagement at the United Way of Central Ohio, said the census numbers are another indication that the community “can’t wait any longer” to do something.

Kenny McDonald, chief economic officer of One Columbus, the region’s economic development team, said that while the region has added nearly 200,000 jobs since 2010 — the best job-growth rate among 10 large Midwestern cities — it’s been insufficient “to raise all boats in the harbor.”

“Growth will help solve those problems,” McDonald said, but community leaders will have to use different ways to achieve overall prosperity.

Ned Hill, a professor of economics at the John Glenn College for Public Policy at Ohio State University, said census numbers show Franklin County has less income inequality than the state as a whole, yet the county’s population and economy are still growing.

“That, to me, is the Franklin County success story,” he said.

In Franklin County, 27% of households had annual incomes of more than $100,000 in 2018. That’s up from 17.7% in 2010. Meanwhile, those households earning less than $50,000 dropped from 52% to 41.5%.

Halbert, the Policy Matters Ohio researcher, said local and state policymakers need to do more to help boost wages. Halbert’s group advocates for a $15-an-hour minimum wage.

“It’s definitely showing up in these inequality numbers,” Halbert said of wage problems. “It’s being compounded if you are a black worker in Ohio.”

Ivania Smith, 26, who experienced homelessness earlier this year, is well aware of income disparities in Columbus, but feels grateful for her new job as a housekeeping supervisor at a Downtown hotel. With a wage around $16 an hour, she is earning much more than at her last job, and she’s hopeful she can continue to move up.

“My whole life, I’ve struggled,” said Smith, who grew up in a household of 13 siblings. “Now, I’m finally at a point where I can treat myself to a lunch now and then. I never could have done that before.”

Expenses don’t make it easy: Her 8-year-old son goes to dialysis once a week, and there are lots of medical expenses and copays.

“But I keep pushing,” Smith said.

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