National Report Commends Minnesota for Work to Reduce Income Inequality
A Joint Release with Prepare + Prosper
St. Paul, Minnesota – September 12, 2014 - The Center on Budget and Policy Priorities (CBPP) recently released a new report that highlights Minnesota for its work to reduce income inequality through improving the state’s Working Family Credit (WFC) and raising the minimum wage. Minnesota is one of 26 states with its own version of the federal Earned Income Tax Credit (EITC), a tax credit based on earnings from work and family size that nationally moves approximately 6.5 million people out of poverty.
In the report, CBPP suggests that other states should do the same as Minnesota. Because Minnesota enacted improvements to the WFC and minimum wage together in the 2014 legislative session, more Minnesotans will be able to climb the ladder to the middle class.
Many of the families that Prepare + Prosper (P+P) serves with free tax and financial services receive the WFC. Additionally, P+P and the Minnesota Budget Project work together to advocate for policies, like the WFC, that make the tax system work better for low-income Minnesotans.
“Tax credits like the WFC directly impact the thousands of taxpayers we serve,” said Tracy Fischman, executive director of P+P. “They make a real difference for Minnesota families – helping households meet vital basic needs and, ideally, save for a rainy day or a future goal. I commend lawmakers for their recent efforts to enhance and expand the WFC, which improves the financial lives of people we serve.”
More than 330,000 Minnesota families receive the Working Family Credit, and around 325,000 Minnesota workers will get a boost in their earnings from the minimum wage increase.
“The improvements made last session were long overdue,” says Nan Madden, the director of the Minnesota Budget Project. “While improving either policy helps low-wage workers, strengthening the minimum wage and WFC together goes further to put working families on the path to economic security.”
Along with Minnesota, the District of Columbia, Maryland, and Rhode Island improved their Earned Income Credits and raised their minimum wages this year.
About Prepare + Prosper
Prepare + Prosper (formerly AccountAbility Minnesota) is a robust organization focused on poverty alleviation, financial capability, and economic mobility for low-income households. It does so by providing free tax and financial services, building the capacity of other organizations providing these services, and by utilizing its experiences to advance policies and practices that directly benefit the people it serves. In 2013, Prepare + Prosper enlisted the help of more than 550 volunteers who prepared taxes for 13,231 individuals who received a collective $24.3 million in refunds.
About the Minnesota Budget Project
The Minnesota Budget Project, an initiative of the Minnesota Council of Nonprofits, provides independent research, analysis and advocacy on budget and tax issues, working to expand opportunity and economic security to all Minnesotans.