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New Reports Examine Who Gets Ahead in West Virginia

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Friday, February 1, 2013   

CHARLESTON, W.Va. – Two new reports shed light on economic challenges facing many of West Virginia's families.

The first report, from the Corporation for Enterprise Development, says half of the state's residents don't have enough savings to keep afloat for three months in case of a job loss or other emergency.

Stuart Frazier, policy analyst with the West Virginia Center on Budget and Policy, says that's in part because the state has an unusually high proportion of working poor – families depending on low-wage jobs.

"It's hard for them to even build up their financial security,” he says. “And it's no surprise that there'd be so many people that don't have enough savings to sort of sustain themselves in case something were to happen."

The second report comes from the Institute on Taxation and Economic Policy. It suggests that state and local governments could help by making changes in the tax code to make it less regressive.

Frazier points out that someone in West Virginia who makes as little as $10,000 a year still has to pay state income tax.

Frazier says West Virginia's economy would be stronger and more stable if the tax code did more to help the working poor build up their assets. And he says there is a basic issue of fairness.

"West Virginia tax system puts a lot of the burden on low-income and middle-income families,” he adds. “And it's really just not even fair that low-income families, the middle-income families are paying the higher share."

One possible solution is a state Earned Income Tax Credit, which like the federal EITC, is aimed at people working low-wage jobs.

Frazier says it's a good example of using the tax code to help people work their way out of poverty.

"It addresses and makes sure that working families get a helping hand,” he says. “And oftentimes after a couple of years using the EITC, they're off of it."

Advocates say they hope the legislature will look at a state EITC in the upcoming session.




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