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Debates Forum

  1. Subscriber no1marauder
    It's Nice to Be Nice
    18 Jan '15 18:44
    Hardly a surprise to anyone who pays attention to such things but this study concludes the following:

    Virtually every state tax system is fundamentally unfair, taking a much greater share of income from low- and middle-income families than from wealthy families. The absence of a graduated personal income tax and overreliance on consumption taxes exacerbate this problem.

    • The lower one’s income, the higher one’s overall effective state and local tax rate.Combining all state and local income, property, sales and excise taxes that Americans pay, the nationwide average effective state and local tax rates by income group are 10.9 percent for the poorest 20 percent of individuals and families, 9.4 percent for the middle 20 percent and 5.4 percent for the top 1 percent.

    • In the 10 states with the most regressive tax structures (the Terrible 10) the bottom 20 percent pay up to seven times as much of their income in taxes as their wealthy counterparts. Washington State is the most regressive, followed by Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Ari­zona, Kansas, and Indiana.

    • Heavy reliance on sales and excise taxes are characteristics of the most regressive state tax systems. Six of the 10 most regressive states derive roughly half to two-thirds of their tax revenue from sales and excise taxes, compared to a national average of roughly one-third . Five of these states do not levy a broad-based personal income tax (four do not have any taxes on personal income and one state only applies its personal income tax to interest and dividends) while four have a personal income tax rate structure that is flat or virtually flat.

    • State personal income taxes are typically more progressive than the other taxes that states levy (e.g property, consumption). Sales and excise taxes are the most regressive, with poor families paying almost eight times more of their income in these taxes than wealthy families, and middle income families pay­ing five times more. Property taxes are typically regressive as well, but less so than sales and excise taxes.

    • Personal income taxes vary in fairness due to differences in rates, deductions, and exemptions across states. For example, the Earned Income Tax Credit improves progressivity in 25 states and the District of Columbia, while nine states undermine progressivity by allowing taxpayers to pay a reduced rate on capital gains income, which primarily benefits higher-income households.

    • State consumption tax structures are highly regressive with an average 7 percent rate on sales and excise taxes for the poor, a 4.7 percent rate for middle-income people, and a 0.8 percent rate for the wealthiest taxpayers. Because food is one of the largest expenses for low-income families, taxing food is particularly regressive; five of the ten most regressive states tax food at the state or local level.

    • Taxes on personal and business property are a significant revenue source for both states and locali­ties and are generally regressive in their overall effect, particularly for middle-income households. A homestead exemption (exempting a flat dollar or percentage amount of property value from a property tax) lessens regressivity. A property tax circuit breaker that caps the amount a property owner pays in property taxes based on their personal income can also reduce regressivity; none of the 10 most regres­sive states offer this tax break to low-income families of all ages.

    • States commended as “low tax” are often high tax states for low- and middle-income families. The 10 states with the highest taxes on the poor are Arizona, Arkansas, Florida, Hawaii, Illinois, Indiana, Pennsylvania, Rhode Island, Texas, and Washington. Seven of these are also among the “terrible ten” because they are not only high tax for the poorest, but low tax for the wealthiest.

    http://www.itep.org/whopays/executive_summary.php
  2. 18 Jan '15 19:11
    FICA tax is the most regressive tax. It's a Federal tax.
  3. Subscriber no1marauder
    It's Nice to Be Nice
    18 Jan '15 19:26
    Originally posted by Eladar
    FICA tax is the most regressive tax. It's a Federal tax.
    Far from it. The tax is proportional until you hit the $118,500 limit and only then becomes regressive. The type of taxes mentioned in the report are all more regressive.
  4. 18 Jan '15 20:17
    Originally posted by no1marauder
    Far from it. The tax is proportional until you hit the $118,500 limit and only then becomes regressive. The type of taxes mentioned in the report are all more regressive.
    As long as you aren't talking about those who make more than 118k.
  5. 18 Jan '15 22:56
    Progressives need to be careful here. If everyone suffers with taxation the next thing you know people will demanding budget cuts.

    The goal is not to piss of at least 51% of the population. However, everyone else can go to Hades cause democracy is the way to go dnnt' ya know.
  6. Subscriber Suzianne
    Misfit Queen
    20 Jan '15 12:08
    Originally posted by whodey
    Progressives need to be careful here. If everyone suffers with taxation the next thing you know people will demanding budget cuts.

    The goal is not to piss of at least 51% of the population. However, everyone else can go to Hades cause democracy is the way to go dnnt' ya know.
    whodey "don't bother me with the facts" don't ya know.
  7. 20 Jan '15 12:11
    Originally posted by Suzianne
    whodey "don't bother me with the facts" don't ya know.
    Reminds me of "Don't bother me with your logic!"
  8. Standard member finnegan
    GENS UNA SUMUS
    20 Jan '15 12:14
    If we have the possibility of knowing the truth, why would we choose to be deceived? (Isiah Berlin)

    When you want to know the truth, you do not care who is right. (Richard Feynman)