Women and Taxes

The following is an excerpt from"Taxes are a Woman’s Issue: Reframing the Debate". It is a very comprehensive description of the necessity of a progressive tax system from the National Council for Research on Women. Though the research was specifically on women, the information applies to everyone who is not super-rich and is important for everyone to understand.

Women generally benefit from a progressive tax system that taxes people according to their ability to pay. They are disadvantaged by a tax system that doesn’t raise enough money for public services that support and help compensate for their patterns of paid and unpaid labor.

How Has This happened?
Significant changes in tax policy over the past quarter century have led to increasingly inadequate budgets at the local, state, and national levels and a decreasingly progressive tax system overall.

Taxes on wealth, the most progressive kinds of taxes, have been systematically rolled back. Capital gains taxes, which apply to profits made on the sale of financial assets like real estate or stocks, account for more than half of the income of the very wealthy, yet tax rates on that income have been more than halved since the 1970s. Likewise, the inheritance tax on large estates and taxes on dividend income from corporate stocks and bonds, both of which affect to a very large degree the very wealthy, have been slashed.

Add to this the great growth in more regressive taxes – like state sales taxes and payroll taxes – and you have a system that is taking less and less from those with more – and more and more from those with less.
Tax cuts since 2001 have accelerated this trend, lowering the combined federal, state and local tax rate for the top 1% of taxpayers by 12 % while low-income taxpayers enjoyed cuts of only 3 %. For women with low incomes, they pose devastating threats to their fundamental security and that of their families. This inequality is built into the ways the nation raises and spends its tax revenues. It is both systemic and structural, affecting all women but not in the same ways or to the same degree.

Less Public Money: Decreasing progressivity has meant that governments have a smaller pool of wealth available to fund our public services.
More Pressure on Low- and Middle- Income Earners: With changes in the tax system at all levels of government, the share of the national tax bill paid by low and middle income wage earners, disproportionately women, is increasing while the wealthy and corporations are seeing more of their incomes remain in their pockets after taxes.
Underfunded Public Services: With decreased tax revenues there is less money to sustain the quality and availability of public services that affect us all – like public education, roads, sanitation, environmental protection, and public safety.
Squeeze on Social Welfare: Need-based public programs like Medicaid, nutrition programs, and childcare on which low-income women particularly depend have been consistently squeezed. In February 2006, Congress and the President cut an additional $39.5 billion over 5 years from such programs as health care for the elderly and student loans.
A Widening Gap between Rich and Poor: In 2001, the richest 20% of households owned 83% of the country’s assets while the bottom 18% had zero or negative net worths – and this discrepancy is even more dramatic when race is considered. Nearly 31% of African American households had zero or minus net worth.

The report is co-authored by Mimi Abramovitz, a professor at the Hunter College School of Social Work, and Sandra Morgen, director of the Center for the Study of Women in Society and professor of anthropology at the University of Oregon, with the National Council for Research on Women and published by the Feminist Press. read the full article