History[ edit ] The Laffer Curve, by the way, was not invented by me.
Middle-income families in these states pay a rate up to three times higher as a share of their income as the wealthiest families. What characteristics do states with particularly regressive tax systems have in common? Looking at the ten most regressive tax states, several important factors stand out: An additional state, Tennessee, only applies its personal income tax to interest and dividend income.
PennsylvaniaIllinois and Indiana use a flat rate which taxes the income of the wealthiest family at the same marginal rate as the poorest wage earner. Arizona has a graduated rate structure, however there is little difference between the bottom marginal rate and top marginal rate.
These states derive roughly half to two-thirds of their tax revenue from these taxes, compared to the national average of 34 percent in fiscal year Back to Contents Just as the combination of flat or non-existent income taxes and high sales and excise taxes leads to very regressive tax systems, the least regressive tax systems have highly progressive income taxes and rely less on sales and excise taxes.
The state also offers a refundable EITC and has a fairly progressive personal income tax rate structure. Montana also relies very little on consumption taxes like Oregon, the state does not have a sales tax.
California has one of the least regressive tax systems due to its heavy reliance on a very progressive income tax. It should be noted that even these least regressive states fail to meet what most people would consider minimal standards of tax fairness.
In each of these states, at least some low- or middle-income groups pay more of their income in state and local taxes than wealthy families. In other words, every single state and local tax system is regressive and even these states that do better than others have much room for improvement.
Back to Contents State and local governments seeking to fund public services have historically relied on three broad types of taxes — personal income, property, and consumption sales and excise taxes. States also rely on non-tax revenue sources such as user fees, charges, and gambling revenues. A few states rely heavily on non-traditional tax sources, such as severance taxes on the extraction of natural resources, which are not included in this analysis.
Each of these taxes has a distinct distributional impact, as the table on this page illustrates: On average, poor families pay only a tenth of the effective income tax rate that the richest families pay, and middle-income families pay about half of the effective rate of the well-off.
Of the three major taxes used by states, the personal income tax is the only one for which effective tax rates rise with income levels. On average, poor homeowners and renters pay more of their incomes in property taxes than do any other income group — and the wealthiest taxpayers pay the least.
Poor families pay almost eight times more of their incomes in these taxes than the best-off families, and middle-income families pay more than five times the rate of the wealthy. Some personal income taxes are far more progressive than others, simply because lawmakers chose to design them that way.
The same is true, to a lesser extent, of property and sales taxes; while any state that relies heavily on these taxes is likely to have a regressive tax structure, lawmakers can take steps to make these taxes less regressive.
Delaware, on the other hand, is one of the most progressive tax states not because any one of its taxes is exceptionally progressive, but because it relies so heavily on a modestly progressive income tax and relies very little on regressive sales and excise taxes.Nov 21, · Republicans are paying for a permanent cut for corporations with an under-the-radar tax increase on individuals..
Senate rules require the Tax Cuts and Jobs Act . TAXATION OF SUGAR SWEETENED BEVERAGES Policy Paper 8 JULY Economics Tax Analysis Chief Directorate. Adopted at over schools, this casebook provides detailed information on federal income taxation, with specific assignments to the Internal Revenue Code, selected cases, and administrative rulings from the Internal Revenue Service.
1. Introduction. This bibliographic essay collects scholarly, government and professional sources in an effort to show how court-ordered human-rights based decisions and legislative responses in U.S. nationality law, coupled with an American notion of nationality as “allegiance” and accidents of history in matters of taxation and a longstanding principle of "citizenship-based taxation.
Sep 27, · The Trump administration’s tax plan provides large benefits for the wealthy, modest benefits for the middle class — and no direct benefit to the poor. Joint Committee on Taxation, Estimated Revenue Effects of the Chairman’s Amendment in the Nature of a Substitute to H.R.
1, the “Tax Cuts and Jobs Act,” Scheduled for Markup by the Committee on Ways and Means on November 6, ,” JCX