States nationwide are implementing harsh measures that hinder individuals from settling their tax obligations, such as revoking licenses and providing less assistance to low-income taxpayers compared to the IRS.
Across the country, the way states have chosen to tax is helping fuel the country’s stark economic inequality, with poorer residents paying a higher share of their income than richer ones — a disproportionate hit for people of color.
Brad Keller was trying to find out how much he owed in state taxes, and why. He couldn’t get a straight answer. Over weeks of calls to the Illinois Department of Revenue last year, one representative told him the problem was wage information missing from his 2020 return. Another said he should have filed returns for 2014 to 2017, even though his income on disability was too low to owe anything. Yet another said he owed taxes from both 2013 and 2008. One Friday night, he came home to seven letters from the agency, each citing different debts ranging from $7,000 to $9,000.
“If a taxpayer loses their job because they can no longer legally drive to work, how is this going to enable them to pay their tax debt?” asked Gooch, with the Center for Taxpayer Rights. “It’s not.” New York, which will yank driver’s licenses once tax debt reaches $10,000, in 2019 that added adjustments for inflation and hardship exemptions to its suspension process.
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