Here are the states with the most progressive and most regressive tax systems:
In Minnesota the rich pay 70% more than the poor. In Florida the rich pay 79% less than the poor.
It will come as no surprise that every one of the progressive tax states voted for Kamala Harris and nearly all of the regressive tax states (8 out of 10) voted for Donald Trump.
So what is with Washington, which is clearly an oddity. Worse than Texas!
Washington has no state income tax.
Alaska has no individual state taxes either. Does this include local taxes (sales and/or property)?
Nevada and Alaska are anomalies here. They rely on revenues from gambling and oil production, respectively.
Without looking, I'd bet that most of the states on the right end of that distribution have no state income taxes or at least get only a small portion of their revenues from income taxes.
We hang our head in shame.
What taxes are included here? I'm sure that they count income tax, but seven states don't have one. Does this also include sales tax, capital gains, property, corporate? E.g. Florida has no income tax but a 6% sales tax, which hits the poor harder than the rich. Minnesota actually has a progressive income rate, starting at 5.35% and rising to 9.85% for joint married over $320K. Massachusetts has a 5% rate rising to 9% for income over $1M.
The sales vs income tax effect depends on a complex set of assumptions about how much people buy.
I’ve got a secret for you: almost any comparison of human beings (based on geography, race, age, income, whatever) “depends on a complex set of assumptions” about those human beings’ behaviors, environments, past experiences and other highly variable and possibly unknown/unknowable characteristics. You can’t make a single social science statement that compares 2 different groups of human beings that doesn’t involve assumptions about one or the other or both, assumptions that are impossible to fully account for because human beings are always complex in how and why they do anything.
So your end argument is basically one of “we can’t fully know how it why anything affects anybody… we should simply stop studying the topic entirely.” Which may have worked in the Dark Ages but people also routinely failed to live into their 40s and suffered a lot in the Dark Ages too… which is partially why humans invented social science to begin with.
" Does this also include sales tax, capital gains, property, corporate? "Of course. Unlike a conservative think tank, these people are not pretending to be the most grossly incompetent f ups on the face of the planet.
Yeah, I've lived most of my life in a State Not On This List, but moved to Tennessee for a few years. I remember being stunned by how much higher the taxes were on everyday things. One in particular that sticks out was how much higher the tax was on buying a car. Stuff like that won't bother the 1% but can be brutal on everyday folks.
I'm sure sales tax figures in, and is why Minnesota is so progressive. Sales taxes are significant, but food and clothing are exempt. That means most of what the poor buys is tax-free. Add in the progressivity of the income tax, and you have a ton of overall progressivity.
Yes, please shaft us some more as long as we have Freedom and Liberty!
I so dearly love my adopted home state of Minnesota. And I’m happy to pay a higher tax rate so that those less fortunate than I do not.
The data should include sales and property taxes to get a more complete picture of the tax burden faced by people in different income brackets.
Assuming the above is accurate, it just shows that the majority of the American electorate are morons, voting for people who enact policies that are diametrically opposed to their self interest.
Across the board tariffs for the poor and working class to help fund $5T of tax cuts for the wealthy and corporation.
"State and local governments have historically used three broad types of taxes to fund public services: income, property, and consumption (sales and excise). States also rely on a range of non-tax revenue sources such as fees, fines, service charges, and royalties, as well as transfers from the federal government."
This just in: some states have figured out how progressive taxation works.
IDK why we have to keep talking about how sales taxes on foods and durable goods and property taxes are regressive while income taxes are the most progressive tax there is. If you earn income, you pay taxes. If you don't earn income, you don't pay taxes. If you earn a lot of income, you pay a lot of taxes. If you earn below the poverty line, you shouldn't be paying taxes.
"If you earn below the poverty line, you shouldn't be paying taxes."
The way that this study imputes taxes that would nearly be impossible.
So, just for the sake of clarity about what I mean, and what many people mean when they say "progressive tax": A flat rate income tax, where you pay a fixed percentage of your income is neither progressive nor regressive. It the definition of neutral on the regressive-progressive scale.
Maybe you get that, and I didn't need to write this. It was certainly unclear to me from what you wrote that you understood this.
A properly conducted study takes account of the fact that landlords pass property tax through to tenants, in full or in part. So that, even if one lives in a state that doesn't tax food or clothing sales, and falls below the lowest income tax bracket, you are paying taxes, unless homeless ....
Legislation to make the haves pay their share sounds great on the campaign trail, but never gets past K St, or a certain W Va senator
“Which Are the Tax-Free States? Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming are the only states that do not levy a state income tax.” https://www.investopedia.com/financial-edge/0210/7-states-with-no-income-tax.aspx
The 9 states with no income tax are the 9 worst on that chart. I don’t know what’s up with Pennsylvania, which apparently does have an income tax but is 10th worst on the chart. (I’d guess either the income tax is not very progressive or that it’s a smaller contributor to state income than sales taxes.)
One thing is for sure: Investopedia is wrong to call these “tax-free states.”
Pennsylvania’s problem is door number 1. Their income tax is not at all progressive.
“Pennsylvania does not, and actually is one of only nine states that does not have a progressive personal income tax. Pennsylvania has a flat personal income tax rate of 3.07%, meaning all income is taxed at this same rate. We also offer no deduction or personal exemptions to reduce taxable income, nor do we provide refundable tax credits.” https://keystoneresearch.org/research_publication/pennsylvanias-terrible-tax-code-asks-more-of-you-as-you-make-less-hitting-communitys-of-color-especially-hard/
I presume this is (broadly speaking) income+sales taxes?
While the chart is interesting, it left me wondering about the limits of this data and drawing inferences. I believe, the majority of lower income people care about: 1) in absolute dollars how much tax they pay 2) what services they receive from the state.
Conceptionally, one could have
State X has a very progressive state tax structure. Yet, in absolute dollars low income people pay a lot of their income in tax and or, get little in the way of state services.
State Y has a regressive tax structure. But, in absolute dollars, low income people don't pay much in terms of taxes.
Rather, you are comparing states with 13% income tax rates and states with zero income tax etc. A low income person MIGHT, in absolute dollars, pay more in state taxes in Vermont than in Florida. Note, I am not claiming the aforementioned situations exist: one can't tell from the chart presented.