August 26, 2020

South Strong: Racial Equity and Taxes in Southern States

ITEP Work in Action

Southern states have a particularly egregious record on tax equity, rooted partly in racism. Lawmakers baked some of the most egregious and anti-democratic tax policies into southern state constitutions, such as supermajority requirements to raise taxes in Florida, Mississippi and Louisiana, income tax rate caps in North Carolina and Georgia, and the recent elimination of Tennessee’s taxes on investment income. Most southern states raise less revenue overall than states in other regions, leading to underinvestment in people and places – such investments are essential to advance equity. This contributes to staggering levels of poverty, particularly for Black and Hispanic families. Southern states generally have lower corporate and personal income taxes for high-income households, which are disproportionately white. When they have a personal income tax, it tends to be flat or have few brackets, forcing low-, moderate- and middle-income people to pay the same or almost the same rate as millionaires. And Southern states frequently raise more from sales and other consumption taxes, hitting low- and middle-income families who have to spend most of what they earn to purchase the basics.

Read more (PDF)