The National  Memo Logo

Smart. Sharp. Funny. Fearless.

Monday, December 09, 2019 {{ new Date().getDay() }}

Trickle-down economics has trickled down to the states.

Virtually every state in the union takes a greater share of income from working families than the rich, according to a new report from the Institute on Taxation and Economic Policy (ITEP).

The report’s stark conclusion finds that state and local tax rates are “fundamentally unfair,” creating a hindrance to economic growth for the middle class that has been exacerbated by states moving away from progressive income taxes and toward consumption taxes.

“There’s a good chance it’s the so-called ‘takers’ who spend so much on necessities that they pay an effective tax rate of 10 or more percent, due largely to sales and property taxes,” Matthew Gardner, executive director of ITEP and an author of the study, said.

Texas, which is often called the “low tax state,” ranks among the states that have the highest taxes on the poor.

The bottom 20 percent pays 6 times the rate of the richest in Washington State, Florida, South Dakota, Illinois, Texas, Tennessee, Arizona, Pennsylvania, Indiana, and Alabama. ITEP called these states the “Terrible Ten” Most Regressive States.

Deductions and the practice of taxing capital gains at a lower rate make state tax codes more regressive. Policies like the earned income tax credit, which Michigan Republicans just cut, make the code more progressive, but only exist in 24 states and the District of Columbia.

Even where states do have progressive income tax rates, they’re effectively shaped to put the burden on working families. “Alabama is a good example of a state with nominally graduated income tax rates that don’t mean much in practice,” the report states. “The state’s top tax rate of 5 percent is not much lower than Louisiana’s top rate — but the top rate kicks in at just $6,000 of taxable income for married couples. ”

This is the fourth such study from ITEP and it includes a comprehensive study of state and local tax rates (PDF).


Start your day with National Memo Newsletter

Know first.

The opinions that matter. Delivered to your inbox every morning

Jeff Danziger lives in New York City. He is represented by CWS Syndicate and the Washington Post Writers Group. He is the recipient of the Herblock Prize and the Thomas Nast (Landau) Prize. He served in the US Army in Vietnam and was awarded the Bronze Star and the Air Medal. He has published eleven books of cartoons, a novel and a memoir. Visit him at DanzigerCartoons.

Donald Trump

Youtube Screenshot

New details about the direct role that Donald Trump played in developing a strategy to overturn the 2020 election were revealed in a federal court filing from election coup attorney John Eastman late Thursday.

Eastman is several months into a battle to keep records of his work for Trump in the run-up to January 6 confidential. but in his latest parry to bar access to emails he says should be protected under attorney-client privilege, he has revealed that Trump sent him at least “two hand-written notes” containing information “he thought might be useful for the anticipated litigation” challenging election results.

Keep reading... Show less
{{ }}