Current TV: All 50 states have a regressive tax system — how does that impact the ’47 percent’?
media mentionViewpoint Staff
September 21, 2012
So the issue of the week is all about taxes — who pays how much to the government, and do the rich pay more or less.
Well, we all know federal income taxes are only one part of the total tax burden. There are lots of other taxes, such as state and local income tax, as well as sales, excise and property taxes.
A regressive tax system is one in which people with low incomes pay a higher percentage of their income in taxes than do wealthier people. So according to the Institute on Taxation and Economic Policy, how many states have a regressive tax system?
It’s our number of the day:
FIFTY.
That’s right. All of them.
Some, of course, are worse than others.
For instance, in Washington state, the poorest 20 percent of the nonelderly paid 17.3 percent of their income in these state and local taxes, while the top 1 percent paid only 2.9 percent.
What makes state tax systems so regressive are sales and excise taxes — which are a big part of state revenue. Those tax rates are the same for everyone.
Yet the poor spend a bigger percentage of their income on products, such as most food and clothing — that are subject to those taxes. So if you run the math, that makes those taxes regressive.
So the next time Mitt Romney attacks the 47 percent, remind him that, for a numbers guy, he’s misreading the data.