Poor Taxed at Higher Rate Than Rich

Mark Blinch/Reuters

A new study revealed Wednesday that state taxes favor the richest residents, according to the Institute on Taxation and Economic Policy. The analysis, which looked at each state’s local tax burden, found the bottom fifth of earners pay as much as seven times as much of their income in taxes as the wealthiest residents in states such as Washington. The study finds that in 2015, the poorest fifth of Americans will pay on average 10.9 percent of their income in state and local taxes, the middle fifth will average 9.4 percent, and the top 1 percent will pay 5.4 percent. The study ranks each state by measuring how regressive (less equal) or progressive (more equal) systems are, based on income before and after taxes in each income group. “Virtually every state’s tax system is fundamentally unfair,” researchers wrote in the report. “Unfair tax systems not only exacerbate widening incoming inequality in the short term, but they also will leave states struggling to raise enough revenue to meet their basic needs in the long term.”