Poor Families Pay Double The State And Local Tax Rate As The Rich: Study

I really do not know how this inequality can continue in the US.




http://www.ibtimes.com/poor-families-pay-double-state-local-tax-rate-rich-study-1782956?utm_content=buffercdd54&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer


Poor Families Pay Double The State And Local Tax Rate As The Rich: Study


By David Sirota @davidsirota d.sirota@ibtimes.com on January 14 2015 9:00 AM



Middle- and low-income Americans are facing far higher state and local taxes than the wealthy, according to a new report assessing tax data from all 50 states. In all, the analysis by the nonpartisan Institute on Taxation and Economic Policy (ITEP) finds that the poorest 20 percent of households pay on average more than twice the effective state and local tax rate (10.9 percent) as the richest 1 percent of taxpayers (5.4 percent).

ITEP researchers say the incongruity derives from state and local governments’ reliance on sales, excise and property taxes rather than on more progressively structured income taxes that increase rates on higher earnings. They argue that the tax disconnect is helping create the largest wealth gap between the rich and middle class that has ever been recorded in American history.

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The 10 states with the largest gap between tax rates on the rich and poor are a politically and geographically diverse group -- from traditional Republican bastions such as Texas and Arizona to Democratic strongholds such as Illinois and Washington. The latter state, reports ITEP, is the most regressive of all, imposing a 16.8 percent effective tax rate on its poorest 20 percent, while letting its 1-percenters pay just a 2.4 percent rate. Four of the top 10 most regressive states levy no personal income tax at all.

By contrast, the states identified as having the smallest gap in tax rates are California, Delaware, Minnesota, Oregon and Vermont -- all Democratic strongholds and all relying more heavily on progressively structured income taxes. Montana is the only Republican-leaning state ITEP researchers identify among the states with the least regressive tax rates......