Citations

DC’s tax system stands out in two key ways, according to a new analysis on how state tax policies affect families at different income levels. First, taxes on DC families living on very low incomes–below about $24,000 a year–are lower than in any state in the U.S. That good news is due primarily to income and property tax credits targeted to help residents working hard to make ends meet. But the analysis shows that families with incomes just above that level pay the same share of their income in DC taxes (income, sales, and property taxes) as the District’s wealthiest…

Building an inclusive economy requires tax policy that meets two conditions. The first is that those with the most are asked to pay more, or at the very least pay as great a share of their income in taxes as everyone else. The second is that enough shared resources are raised through the tax code to invest adequately in foundations of a strong economy including good schools, access to health care, and safe and modern infrastructure.

Iowa taxes its middle- and low-income families more as a share of income than it does wealthy families, a long-term trend worsened by the 2018 tax overhaul. The latest “Who Pays” report by the Washington-based Institute on Taxation and Economic Policy (ITEP), again shows the effect of sales taxes and property taxes on lower-income households tilts Iowa’s overall tax system so the poorest pay the highest percentage in taxes.

“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.”

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.

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).

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.

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.

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…

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.

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.

An estimated 27,000 undocumented Multnomah County residents pay nearly $19 million annually in state and local taxes. For perspective, that is enough to hire 217 teachers. Read more here

An estimated 27,000 undocumented Washington County residents pay more than $20 million annually in state and local taxes. For perspective, that is enough to hire 232 teachers. Read more here

An estimated 18,000 undocumented Marion County residents pay nearly $14 million annually in state and local taxes. For perspective, $14 million is enough to hire 157 teachers. Read more here

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.

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. 

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.

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.

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…

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.

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…

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.

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.