Bloomberg BNA: Individual Income Tax Insights: Fifty States of Rates – State Tax Systems Don’t Play Fair
media mention“All state tax systems are inherently unfair, at least that is the verdict issued by the Institute on Taxation and Economic Policy (ITEP). ITEP’s 2015 Who Pays: A Distributional Analysis of the Tax Systems in All Fifty States report analyzed state and local tax systems to assess the fairness with which each system is designed and operated. The basis of this study was the measurement of state and local taxes that will be paid in 2015 by non-elderly taxpayers throughout a range of income groups.
50 states and the District of Columbia, detailing the effects of each jurisdiction’s tax system on income inequality. The 10 states determined to be the most regressive are Washington, Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Arizona, Kansas and Indiana. According to this study, “[m]iddle-income families in these states pay a rate up to three times higher as a share of their income as the wealthiest families.” This report deems these states as having the most “unfair” or regressive tax systems. The fairness counterargument, however, often comes down to that although the tax rate may be lower for wealthier taxpayers, they are, in fact, paying significantly more money in taxes.”