Major tax overhauls are on the agenda in a record number of states, and “Who Pays?” documents in state-by-state detail the precise distribution of state income taxes, sales and excise taxes and property taxes paid by each income group as of January 2013. It is a critical baseline against which future proposals can be measured.
Most significantly, the report concludes that all states have regressive tax systems that ask more from low- and middle-income families than from the wealthiest. It also finds:
- The average overall effective state and local tax rates by income group nationwide are 11.1 percent for the bottom 20 percent, 9.4 percent for the middle 20 percent and 5.6 percent for the top 1 percent
- Ten states with the most regressive tax systems are: Washington, Florida, South Dakota, Texas, Illinois, Tennessee, Arizona, Pennsylvania, Alabama and Indiana.
- States praised as “low tax” are often high tax states for low and middle income families.