Who Pays? 6th Edition – State-by-State Data
IN MOST STATES, STATE AND LOCAL TAX SYSTEMS WORSEN INEQUALITY
Forty-five states have regressive tax systems that exacerbate income inequality. When tax systems rely on the lowest-income earners to pay the greatest proportion of their income in state and local taxes, gaps between the most affluent and the rest of us continue to grow.
The ITEP Tax Inequality Index measures the effects of each state’s tax system on income inequality by assessing the comparative impact a state’s tax system has on the post-tax incomes of taxpayers at different income levels. Essentially, it answers the following question: Are incomes more equal, or less equal, after state taxes than before taxes?
For example, consider this scenario: if taxpayers in the top 1 percent are left with a higher percentage of their pre-tax income to spend on their day-to-day living and to save for the future than low- and middle-income taxpayers, the tax system is regressive and receives a negative tax inequality index score. This indicates that the income inequality that existed before the levying of state and local taxes has been made worse by those taxes. On the other hand, states with slightly progressive tax structures have positive tax inequality indexes. This means that after taking state and local taxes into account incomes are no less equal than they were before taxes; and tax systems in those states, at the very least, did not worsen income inequality.
ITEP Tax Inequality Index
|States in order of rank from least equitable to more equitable|
|1 Washington||14 Louisiana||27 Georgia||40 Utah|
|2 Texas||15 Hawaii||28 Missouri||41 Oregon|
|3 Florida||16 New Hampshire||29 Connecticut||42 Maryland|
|4 South Dakota||17 North Dakota||30 Massachusetts||43 Montana|
|5 Nevada||18 Alabama||31 North Carolina||44 New York|
|6 Tennessee||19 New Mexico||32 Rhode Island||45 Maine|
|7 Pennsylvania||20 Arkansas||33 Virginia||46 New Jersey|
|8 Illinois||21 Iowa||34 Wisconsin||47 Minnesota|
|9 Oklahoma||22 Michigan||35 Colorado||48 Delaware|
|10 Wyoming||23 Kansas||36 Nebraska||49 Vermont|
|11 Arizona||24 Mississippi||37 West Virginia||50 District of Columbia|
|12 Indiana||25 Kentucky||38 Idaho||51 California|
|13 Ohio||26 Alaska||39 South Carolina|
NOTE: See Appendix B for detailed ITEP Tax Inequality Index and Methodology for more information.
Select a state by clicking on the map or choosing one from the dropdown.