The Nation: How Cities’ Funding Woes Are Driving Racial and Economic Injustice–And What We Can Do About It

Many towns have resorted to privatizing formerly public responsibilities such as trash collection, sewage, roads and parks, and introducing new fees to force residents to foot the bill directly. These fees and taxes are often extremely regressive, because as everyone is forced to pay a flat rate, poor people end up paying a higher percentage of their income. A recent study conducted by the Institute on Taxation and Economic Policy found that the nationwide average effective state and local tax rates are 10.9 percent for the poorest fifth of taxpayers and 5.4 percent for the wealthiest 1 percent. In fact, in the ten states with the most regressive tax structures, the poorest fifth pay as much as seven times the percentage of their income in taxes and fees as the wealthiest residents do.

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