The Times Daily: Tax Incomes Not Goods and Services

The Institute on Taxation and Economic Policy determined that while the lowest 20 percent of earners pay more than 10 percent of their income in state and local taxes, the top 1 percent pays closer to 5 percent.

While it’s true that a wealthy person pays more, by total, than a poor person and tax burdens can be measured by more than simple percentages, the authors of the Keystone report contend that a less regressive tax code is the answer to state budget woes and could bring in $200 billion more in state and local taxes nationwide. In states like Alabama, they project a $2 billion boost. They say that could be accomplished simply by taxing the top fifth of earners at the same rate as the middle class.

Their study shows that growing inequality has skewed huge amounts of income to the 1 percent who pay far lower tax rates than the middle class, squeezing state budgets unnecessarily.

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