Wyo File: Why Are We Footing the Bill for Billionaires?

he question, then, will be: Who pays?

That question — “Who pays?” — is also at the center of a report released last month by the Washington, D.C.-based Institute on Taxation and Economic Policy. The report, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, looks at the different tax rates people pay in the United States across income brackets. Its results should help guide any conversation related to tax reform in Wyoming.

Unsurprisingly, ITEP’s analysis reveals that one group among us pays just about the lowest tax rate of anyone in America: Wyoming’s ultra-rich.

Jackson Hole’s billionaires pay a tax rate three times lower than most working Wyomingites. With average earnings of more than $2 million per year — and most of that coming from “non-labor income” like investments — Wyoming’s richest one percent pays an average tax rate of just 2.6 percent. Meanwhile, the middle- and working-classes here sacrifice to taxes between 7 – 10 percent of what they earn.

Compare that to our neighbors in Montana. There, working- and middle-class folks pay a lower rate than they do here (between 6 – 8 percent), while Montana’s richest pay a much higher tax rate (6.5 percent).

The wealthiest Wyomingites also pay far less than the richest people in places like Oklahoma (6.2 percent), Alabama (5.0 percent), and Arkansas (6.9 percent). They even pay a lower rate than one percenters who live in other states that lack income tax, like Texas (3.1 percent) and Washington (3.0 percent). Read more

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