The Earned Income Tax Credit (EITC) is widely hailed as an anti-poverty tool that can make a huge difference in the lives of low-income folks. Often, it’s held up as an alternative to increasing the minimum wage — rather than paying people a little bit more out of their boss’s coffers every other week, they get one big check from the government.
But what happens if the IRS doesn’t know where to mail the check? Or what if you didn’t know you should’ve filed in the first place?
With so much conversation about cutting taxes and funding services, it can be easy to forget that for a lot of people, April 15 is just another day in the middle of the month.
Folks who live outside are often characterized as somehow different from those who live indoors, and frequently, that divide is drawn by describing who does and doesn’t pay taxes. But in Washington, because we don’t have an income tax, filing your proper W form doesn’t mean you’re flooding the system with cash. Instead, it’s property tax, which renters indirectly pay, and sales tax, which we all pay, that funds our government.
Homeless folks don’t skip their taxes because they don’t work — a recent survey of Seattle’s homeless population found that of those who could, most did — but instead, because there are distinct barriers that make it hard to do. Their work is often under the table for cash or trade. Even those who do have a job and pay Supplemental Security Income and Labor & Industry taxes may not meet the income threshold that would require them to file (about $10,000 per year for a single person).
There are also tangible barriers, such as where a person receives mail or whether they have access to tax software. And even then, it’s not a secret that the IRS doesn’t exactly make taxes simple or easy to file, especially for people who may not have completed their formal education. Public libraries, service providers and shelters sometimes offer tax assistance, but without certified public accountants on-staff, people who are already broke may end up getting shorted even more.
Failing to file taxes, though, can mean missing out on a lot of programs that are designed to benefit low-income people. In addition to the EITC, Washington residents can write off some of the aforementioned sales tax that they’ve paid (which disproportionately burdens the lowest earners), as well as deducting their health care costs.
Even if you do get a refund check, many people who live in extreme poverty can’t deposit it because they don’t have a checking account.
And again, without an address, can you be sure you’ll get it?
No one enjoys paying taxes, but for folks living outside, tax cuts just mean more hungry nights in the cold.
Hanna Brooks Olsen is the co-founder of Seattlish; her work has appeared in the Atlantic, the Nation, Salon, Fast Company and VICE.