https://www.nationofchange.org/2024/01/10/wealth-over-fairness-shocking-report-unveils-tax-favoritism-for-the-rich-in-41-us-states/
Wealth over fairness: Shocking report unveils #tax favoritism for the #rich in 41 #US #states
According to the #report, in 41 out of 50 states, the wealthiest 1 percent are subjected to lower tax rates compared to other #income groups.
Ruth Milka -January 10, 2024
..."The report contextualizes the current tax systems against the backdrop of recent trends in various states. Notably, several states have embarked on tax-cutting sprees, significantly reducing rates for #corporations and the #wealthy. This trend comes at a time when reports indicate that ultra-rich #Americans hold an estimated $8.5 trillion in untaxed assets.
In contrast to the prevailing trend, six states – California, Maine, Minnesota, New Jersey, New York, and Vermont – along with the District of Columbia, have implemented progressive tax systems. For instance, Massachusetts’ introduction of a millionaires tax led to a substantial improvement in the state’s ranking on ITEP’s Tax Inequality Index. Similarly, Minnesota has enhanced its tax policies for high earners while providing benefits for lower-income families.
Florida stands out as having the most regressive tax code in the U.S., with the wealthiest 1% paying a tax rate of only 2.7 percent, in stark contrast to the 13.2 percent rate for the poorest 20 percent. The lack of personal income taxes in Florida and similar states leads to a heavier reliance on regressive consumption and property taxes.
Recent years have seen a trend towards more regressive tax systems in many states. Kentucky, for example, has moved toward a flat tax system, resulting in significant tax cuts for higher-income families, offset by increased sales and excise taxes on a range of services and goods.
Some states are showing that tax regressivity can be addressed. New Mexico and Massachusetts have made notable progress through reforms to refundable credits and increased taxation of top earners. These efforts demonstrate the potential for policy changes to create more equitable tax systems.
The ITEP report sheds light on the pervasive issue of tax inequality across the United States. With 41 states taxing their wealthiest citizens at lower rates than other income groups, the study calls into question the fairness and effectiveness of current state tax policies. As ITEP’s Aidan Davis puts it, “The regressive state tax laws we see today are a policy choice, and it’s clear there are better choices available to lawmakers.” This conclusion underscores the need for a reevaluation of tax systems in favor of a more equitable approach."...
