Monday, February 6, 2012

Data on State Taxes On Scale Of Regressivity

Conservatives hate the federal income tax because it is progressive. That is, tax rates are higher as income increases. They have been effective in making the federal income tax less progressive but state taxes are very regressive. This article provides the tax data on each state. It turns out that all of the states have a regressive tax system. That is, the tax burden as a percent of income falls as income increases. Mississippi is the median state on a scale of regressiveness. In Mississippi, the lowest income group's tax payments as a percent of their income is 2.0 times greater than the share of income going to state tax payments by the top 1%. Half of the states have a more regressive tax code, and half are less regressive than Mississippi. Most of the states get their largest share of tax income from the sales tax and those in the lowest tax bracket spend almost all of their income.

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