“Taxes are the way we accomplish great things for our state – build our schools and infrastructure, provide health care and public safety, and more,” said James Jimenez, executive director of New Mexico Voices for Children, which partnered with ITEP on the report release. “These systems and services underpin our economy and improve our quality of life. We all need to do our part to support them, but our current state tax system ensures that those who can afford to pay the most actually pay the least.”
Who Pays?
Who Pays? A Distributional Analysis of the Tax Systems in All 50 States is the Institute on Taxation and Economic Policy’s flagship report. First published in 1996, and updated most recently in 2018, Who Pays? shows the distributional impact by income level of all major state and local taxes in each state, as well as in the District of Columbia. This section highlights related Who Pays? resources, articles and information.
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ITEP Work in Action October 17, 2018 New Mexico Voices for Children: New Analysis: Lowest-Income Taxpayers in NM Pay 1.8 Times the Tax Rate Paid by the Richest New Mexicans
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ITEP Work in Action October 17, 2018 Michigan League for Public Policy: News Flash: Michigan Taxes Are Still Upside-Down
While no news is often regarded as good news, in this case, it’s not. Michigan’s tax structure is still highly regressive, and taxes Michiganders with low incomes at a higher rate than Michigan’s wealthiest residents, according to a report by the Institute on Taxation and Economic Policy.
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ITEP Work in Action October 17, 2018 Oregon Center for Public Policy: Oregon Taxes Fall Hardest on Those Who Earn the Least
Oregon’s poorest families pay more in taxes as a share of income than any group of taxpayers in the state, while the richest Oregonians pay the smallest share of any group. That is the conclusion of a new report by the Washington, D.C.-based Institute on Taxation and Economic Policy (ITEP).
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ITEP Work in Action October 17, 2018 Arkansas Advocates for Children and Families: Arkansas Tax System Worsens Economic Inequality
Another key driver of inequality in Arkansas’s tax system is the preferential treatment given to capital gains income. Currently, half of all capital gains income is exempted, or ignored, from income taxes even though nearly no one makes a significant share of their income through capital gains (except for the top 1 percent). According to a report from the Congressional Budget Office, capital gains make up 38 percent of the income of the richest 1 percent of households in this country, compared to just 5 percent of the income for the poorest households.
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ITEP Work in Action October 17, 2018 Minnesota Budget Project: Minnesota Ranks High for Tax Fairness in 50-State Study
In an era of income inequality and growing concentration of wealth, a new 50-state study released today analyzes whether state tax systems make income inequality better or worse. The Institute on Taxation and Economic Policy (ITEP) finds that nearly every state fails basic measures of fairness, but Minnesota is among a small number of states where income inequality is reduced by state tax policy.
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ITEP Work in Action October 17, 2018 NC Policy Watch: Low-income Tax Payers in NC Pay More of Their Income in State and Local Taxes Each Year Than the Richest Taxpayers
Sales taxes play a critical role in the regressive and consequently inequitable nature of the North Carolina tax system. Like most other states, North Carolina relies on sales and excise taxes (30.7% of the 2018-2019 approved budget) as a primary mechanism to raise revenue. However, in North Carolina, sales and excise taxes are the most regressive taxes when compared to income and property taxes. The lowest 20% of North Carolina workers pay 6.1 percent in sales taxes as a percentage of their income while the top 1 percent pays less than 1 percent in sales taxes as a percentage of their income.
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ITEP Work in Action October 17, 2018 Alabama Arise: The Less You Make, the More You Pay: Alabama’s Taxes Remain Upside Down
Low-income Alabamians pay twice as much in state and local taxes as a share of their income compared to the state’s wealthiest residents, according to a study released Wednesday, Oct. 17, 2018, by the Institute on Taxation and Economic Policy (ITEP), a nonprofit research organization based in Washington, D.C. The study, Who Pays?, analyzes major state and local taxes in all 50 states, including personal and corporate income taxes, property taxes, sales and other excise taxes.
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ITEP Work in Action October 17, 2018 Uprise RI: Low-income Taxpayers in Rhode Island Pay Over 50 Percent More in Taxes Than the Wealthiest
There’s a practical reason for Rhode Island and all states to be concerned about regressive tax structures, according to ITEP. If the nation fails to address growing income inequality, states will have difficulty raising the revenue they need over time. The more income that goes to the wealthy (and the lower a state’s overall tax rate on the wealthy), the slower a state’s revenue grows over time.
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ITEP Work in Action October 17, 2018 Arkansas Times: Report: Arkansas Taxes Unfair ….. To the Poor
Arkansas Advocates for Children and Families is highlighting a new report relevant to ongoing legislative discussions of “tax reform.” It does not suggest the problem is taxation on the rich.
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ITEP Work in Action October 17, 2018 Budget and Policy Center: Washington State Again Ranks Worst In The Nation For Our State Tax Code
Despite the many ways Washington state takes prides in its spirit of innovation, it still ranks dead last when it comes to its tax code, according to a new study by the Institute on Taxation and Economic Policy (ITEP). Our state has the most upside-down tax code in the country, forcing people with the lowest incomes to pay 17.8 percent in state and local taxes as a percent of their income – while the state’s wealthiest residents pay just 3 percent.
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ITEP Work in Action October 17, 2018 West Virginia Center on Budget & Policy: Low-Income West Virginians Pay Far More in Taxes as a Percent of Income Than Wealthiest West Virginians
West Virginia’s tax system is regarded as regressive because the lower one’s income, the higher one’s effective tax rate. While West Virginia has a progressive personal income (meaning the higher one’s income, the higher one’s effective personal income tax rate), it also, like most other states, relies heavily on the more regressive sales and excise taxes to raise revenue. Low-income West Virginians pay up to 6.6 percent of their income on sales and excise taxes, while the wealthiest in the state pay less than one percent of income in state and local sales taxes.
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ITEP Work in Action October 17, 2018 Public Assets Institute: New report: Vermont’s Tax System Is Among the Least Regressive
Tax systems generally favor the wealthy, but Vermont’s system is skewed less than most other states when it comes to high-income taxpayers. That was the key finding of a study released today by the Institute on Taxation and Economic Policy (ITEP) and Public Assets Institute.
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ITEP Work in Action October 17, 2018 Louisiana Budget Project: Louisiana’s Tax Code is Still Regressive
The wealthiest households in Louisiana continue to pay state and local taxes at a lower rate than those in the middle class and below, according to a new analysis that breaks down the tax rates by income brackets in every state. The report, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States found that households with incomes in the lowest 20 percent pay nearly twice as much of their income in taxes as households in the top 1 percent. Louisiana has the 14th most regressive tax code in the country, according to the report by the Institute on Taxation and Economic Policy.
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ITEP Work in Action October 17, 2018 Better Wyoming: New Report: Low-income Residents in Wyoming Pay an Effective Tax Rate More Than Three Times Higher Than the State’s Wealthiest One Percent
A new study released today by the Institute on Taxation and Economic Policy (ITEP) and Better Wyoming finds that the lowest-income Wyomingites pay an effective tax rate more than three times higher than the state’s richest residents.
Wyoming’s tax rate gap between the working poor and the ultra-rich is one of the worst in the nation.
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ITEP Work in Action October 17, 2018 The Half Sheet: Virginia’s Tax System Is Upside Down
Virginia’s state and local taxes help to shape economic opportunity across the state. That’s because state and local revenues pay for the building blocks of thriving communities: schools, roads, libraries, and other public services. Unfortunately, the current state and local tax system is upside down. Families in Virginia have taxes withheld from their paychecks, and they also pay taxes when they shop at local businesses, buy groceries, or fill their gas tanks. But updated analysis from the Institute on Taxation and Economic Policy (ITEP) shows that Virginia’s low- and moderate-income households pay a higher share of their incomes toward state and local taxes than the highest-income households.
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ITEP Work in Action October 17, 2018 Oklahoma Policy Institute: New Analysis: Low-income Taxpayers in Oklahoma Pay More than Twice the Tax Rate Paid by the Richest Oklahomans
While Oklahoma has a reputation as a low tax state, poor and middle-income Oklahomans are actually paying a greater share of their income in taxes than the national average, while the richest 5 percent of households — with annual incomes of $194,500 or more — pay less.
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ITEP Work in Action October 17, 2018 Budget and Policy Center: Unacceptable. Washington Still Has the Nation’s Most Inequitable State Tax Code
Washington state continues to have the most upside-down tax code of any U.S. state, according to a new report from the Institute on Taxation and Economic Policy (ITEP). It wrongly requires people with the lowest incomes to pay six times more in taxes as a percent of their income than the state’s wealthiest residents to fund investments that benefit all Washingtonians.
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ITEP Work in Action October 17, 2018 Florida Policy Institute: Florida Has Third Most Unfair State and Local Tax System
Florida’s reputation as a “low-tax” state belies the reality that it is, in fact, a high-tax state for low- and moderate-income residents. Floridians with the lowest incomes — those earning less than $18,700 — contribute 12.7 percent of their incomes to state and local taxes, while the wealthiest top 1 percent — those with incomes of more than $548,700 — contribute just 2.3 percent of their income.
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ITEP Work in Action October 17, 2018 Louisiana Budget Project: Who Pays Taxes in Louisiana?
When it comes to paying for government services, Louisiana asks a lot more of those with the fewest resources than it does of its wealthiest citizens, according to new analysis by the Institute on Taxation and Economic Policy. Thanks to a heavy reliance on sales taxes and tax exemptions that favor the wealthy, the less you earn in Louisiana, the more of you pay in taxes as a percentage of income.
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ITEP Work in Action October 17, 2018 Center on Budget Policy Priorities: State, Local Tax Systems Worsening Inequality
State and local tax systems can be a powerful tool for boosting economic opportunity, creating broadly shared prosperity, and building equitable state economies. But in nearly every state, they’re reinforcing and often worsening inequality, as the Institute on Taxation and Economic Policy shows in a new report.
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ITEP Work in Action October 17, 2018 Kentucky Center for Economic Policy: New Report: Wealthiest Kentuckians Pay the Lowest Tax Rate and the Problem Is Worsening
The study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, evaluates the major components of state and local tax systems – including personal and corporate income taxes, property taxes, sales taxes and other excise taxes – for their overall distributional impact across income groups. For example, Kentucky’s low income tax credit means that people in poverty do not pay state income taxes. However, because the state fails to provide refundable tax credits to offset sales, excise and property taxes paid by low-income people, and because the state has a flat as opposed to graduated income tax rate structure, the poorest 20 percent of Kentuckians pay an effective tax rate 1.42 times higher than that paid by the top 1 percent.
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ITEP Work in Action October 17, 2018 Indiana Institute for Working Families: New Analysis: Indiana’s Tax System is Among the Dozen Most Regressive in the Country
The new ‘Who Pays?’ analysis follows the Institute’s August report ‘The Status of Working Families in Indiana, 2018’ which found the wealthiest Indiana earners have received an extra $2,446 from combined state income, corporate, and fuel tax changes since 2012, while taxes for the bottom 60% of middle class and working families have increased by an average $36.
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ITEP Work in Action October 17, 2018 Insider NJ: New Analysis: Middle Class Taxpayers in New Jersey Still Paying More Than Tax Rate Paid by Richest 1 Percent of New Jerseyans
A new study released today by the Institute on Taxation and Economic Policy (ITEP) and New Jersey Policy Perspective (NJPP) finds that New Jersey’s middle class families pay more in taxes as a percent of their income compared to the state’s wealthiest residents.
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ITEP Work in Action October 17, 2018 Politico Morning Tax: Desperately Seeking Clarity
MOST STATE TAX SYSTEMS REGRESSIVE: No state has more regressive taxes on its citizens than Washington, followed by Texas, Florida, South Dakota and Nevada, according to a distributional analysis of state tax systems that will be released today by the Institute on Taxation and Economic Policy. Most states take a larger share of income from low- and middle-income families than from wealthy families, it said. The 10 most regressive in the rankings tax their residents in the bottom 20 percent of the income scale at rates up to six times higher than the wealthy, while their middle-income families pay a rate up to four times higher as a share of their income than the wealthiest families, said the report, the sixth edition of the analysis. California is the most progressive, ranking 51st, just ahead the District of Columbia.
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ITEP Work in Action October 17, 2018 Public News Service: Report: NM Tax Overhaul Would Benefit Kids, Families
Regressive tax systems hurt children and families, according to a new report from the Institute on Taxation and Economic Policy – and by that standard, it says New Mexico has the 19th-worst tax system in the United States.
The study showed that as a share of their income, the lowest-income New Mexicans are paying state and local tax rates almost double those of the state’s wealthiest residents.