Indiana has the 10th most regressive tax structure in the nation, according to the Institute on Taxation and Economic Policy. Households in the lowest percentile, excluding seniors, pay 12 percent of annual income on state and local taxes. The top 1 percent pay just 5.2 percent. Indiana’s flat income tax rate of 3.4 percent “taxes the income of the wealthiest family at the same marginal rate as the poorest wage earner.”
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