flounder
Rancher
Joined: 03 Sep 2005
Posts: 2524
Location: TEXAS
|
 Posted: Sat Aug 06, 2011 10:31 am Post subject: who pays more ??? |
 |
|
Institute on Taxation and Economic Policy
1616 P Street, NW • Washington, D.C. 20036 • (202) 299-1066
EMBARGOED FOR RELEASE ON
WEDNESDAY, NOVEMBER 18, 2009 AT 10:00 am
CONTACT: Ed Meyers, 202/299-1066
State & Local Taxes Hit Poor & Middle Class Far Harder than the Wealthy
By an overwhelming margin, most states tax their middle- and low-income families far more heavily than the wealthy, according to a new study by the Institute on Taxation & Economic Policy. “In the coming months, lawmakers across the nation will be forced to make difficult decisions about budget-balancing tax changes—which makes it vital to understand who is hit hardest by state and local taxes right now,” said Matthew Gardner, lead author of the study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States. “The harsh reality is that most states require their poor and middleincome taxpayers to pay the most taxes as a share of income.”
Nationwide, the study found that middle- and low-income non-elderly families pay much higher shares of their income in state and local taxes than do the very well-off:
# The average state and local tax rate on the best-off one percent of families is 6.4 percent before accounting for the tax savings from federal itemized deductions. After the federal offset, the effective tax rate on the best off one percent is a mere 5.2 percent.
# The average tax rate on families in the middle 20 percent of the income spectrum is 9.7 percent before the federal offset and 9.4 percent after—almost twice the effective rate that the richest people pay.
# The average tax rate on the poorest 20 percent of families is the highest of all. At 10.9 percent, it is more than double the effective rate on the very wealthy.
“Fairness is in the eye of the beholder.” noted Gardner. “But virtually anyone would agree that this upside-down approach to state and local taxes is astonishingly inequitable.”
The “Terrible Ten” Most Regressive Tax Systems
Ten states—Washington, Florida, Tennessee, South Dakota, Texas, Illinois, Michigan, Pennsylvania, Nevada, and Alabama—are particularly regressive. These “Terrible Ten” states ask poor families—those in the bottom 20% of the income scale—to pay almost six times as much of their earnings in taxes as do the wealthy. Middle-income families in these states pay up to three-and-a-half times as high a share of their income as the wealthiest families. “Virtually every state has a regressive tax system,” noted Gardner. “But these ten states stand out for the extraordinary degree to which they have shifted the cost of funding public investments to their very poorest residents.”
The report identifies several factors that make these states more regressive than others:
# The most regressive states generally either do not levy an income tax, or levy the tax at a flat rate;
# These states typically have an especially high reliance on regressive sales and excise taxes;
# These states usually do not allow targeted low-income tax credits such as the Earned Income Tax
Credit; these tax credits are especially effective in reducing state tax unfairness.
MORE . . .
Page 2 of 3
Who Pays? examines the tax systems of all 50 states and the District of Columbia, using the Institute on Taxation & Economic Policy Microsimulation Tax Model. The ITEP Model is similar in methodology and data sources to the elaborate computer models used by the U.S. Treasury and the congressional Joint Committee on Taxation, except that the ITEP Model adds state-by-state estimating capabilities.
The findings published in the study detail state and local taxes paid by non-elderly couples and individuals. The study includes all major state and local taxes: personal and corporate income taxes, property taxes, and sales and excise taxes.
“For lawmakers seeking to make their tax systems less unfair, there is an obvious strategy available,” noted Gardner. “Shifting state and local revenues away from sales and excise taxes, and towards the progressive personal income tax, will make tax systems fairer for low- and middle-income families. Conversely, states that choose to balance their budgets by further increasing the general sales tax or cigarette taxes will make their tax systems even more unbalanced and unfair.”
Implications for State Budget Battles in 2010
“In the coming months, many states’ lawmakers will convene to deal with fiscal shortfalls even worse than those they faced last year,” Gardner said. “Lawmakers may choose to close these budget gaps in the same way that they have done all too often in the past—through regressive tax hikes. Or they may decide instead to ask wealthier families to pay tax rates more commensurate with their incomes. In either case, the path that states choose in the upcoming year will have a major impact on the wellbeing of their citizens—and on the fairness of state and local taxes.”
A one-page chart summarizing U.S. average state & local taxes by income group follows
http://www.itepnet.org/whopays3release.pdf
Who Pays? A Distributional Analysis of the Tax Systems in All 50 States Institute
3rd Edition Carl Davis Kelly Davis Matthew Gardner Robert S. McIntyre Jeff McLynch Alla Sapozhnikova November 2009 Institute on Taxation and Economic Policy 1616 P Street, NW • Washington, D.C. 20036 • (202) 299-1066 www.itepnet.org
Conclusion
The main finding of this report — that virtually every state’s tax system is fundamentally unfair — comes with a silver lining. In a growing number of states, awareness of this problem is building among lawmakers, the media, and the public. And many states are now considering progressive tax reforms, including a low-income tax credits and high-end income tax increases, that would make state and local taxes at least somewhat less unfair.
Yet the same lawmakers have continued to use regressive sales and excise tax hikes to fund essential services, swamping the progressive impact of such low-income credits. The bleak reality is that of the twenty three states and the District of Columbia that have taken steps to reduce the tax burden on the working poor by enacting state earned-income tax credits, nine still require their poorest taxpayers to pay a higher effective tax rate than any other income group. And many of the states that have been more generous in enacting low-income tax credits have provided even greater benefits to the wealthiest taxpayers in the form of income tax rate reductions.
The current economic slowdown will likely force many states to undertake a thorny debate over revenue-raising tax reforms over the next year. The results of this study should provide an important blueprint for lawmakers seeking to understand the inequitable tax structures enacted by their predecessors. States may ignore these lessons and continue to balance state budgets on the backs of their poorest citizens. Or they may decide instead to ask wealthier families to pay tax rates more commensurate with their incomes. In either case, the path that states choose in the near future will have a major impact on the well-being of their citizens — and on the fairness of state and local taxes.
http://www.itepnet.org/whopays3.pdf
see also ;
http://www.itepnet.org/state_reports/whopaysfactsheets.php
TEXAS
http://www.itepnet.org/wp2009/tx_whopays_factsheet.pdf
Sen. Bernie Sanders Independent U.S. Senator from Vermont
Why I Voted No on the Deficit Deal
Posted: 8/5/11 01:13 PM ET
A $2.5 trillion deficit-reduction deal brokered by Senate Minority Leader Mitch McConnell, House Speaker John Boehner, and President Barack Obama is grotesquely unfair. It also is bad economic policy. In the midst of a terrible recession, it will cost hundreds of thousands of jobs.
At a time when the wealthiest people in this country are doing extremely well, and when their effective tax rate is the lowest in decades, the rich won't contribute one penny more for deficit reduction. When corporate profits are soaring and many giant corporations avoid federal income taxes because of obscene loopholes in the tax code, corporate America will not be asked to contribute one penny more for deficit reduction. On the other hand, working families, children, the sick and the elderly -- many of whom are already suffering because of the recession -- will shoulder the entire burden.
The corporate media -- which, by and large, covered this debate as if it were a baseball game with political "winners and losers" -- mostly glossed over the real-life implications of $917 billion in cuts over the next 10 years. Nobody can predict exactly what programs will fall under the knife or say how much they will be cut. Those decisions will be made over the coming months and years by the appropriations committees. But here's what's at stake:
At a time when there are long waiting lists for affordable childcare and Head Start, it is likely that these programs will be cut significantly. At a time when the United States is falling further and further behind other countries in the quality of our education, it is likely that tens of thousands of teachers and school personnel will be laid off. At a time when working families are finding it harder to send their kids to college, it is likely that there will be cuts in federal student aid programs. At a time when hunger among seniors and children is rising, it is likely that there will be cuts in various nutrition programs. At a time when 50 million Americans have no health insurance and many of them are utilizing community health centers for their medical needs, it is likely that there will be cuts in primary healthcare. At a time when states, cities and towns already laid off over 500,000 public service employees, it is likely that there will be even more police and firefighter layoffs and large reductions in federal support for roads, bridges, water quality, sewage and public transportation.
That's just for starters. There likely will be cuts in home heating assistance, affordable housing, support for family-based agriculture, and research in finding cures for cancer and other diseases. There likely will be major staffing reductions in agencies charged with protecting the physical health and economic well-being of our people. It is quite likely that the EPA, which enforces clean water and clean air rules, will be cut. The Securities and Exchange Commission, which regulates Wall Street, will be undermined. It is also very possible that the Social Security Administration, which assures that seniors and the disabled receive the benefits to which they are entitled in a timely manner, will also be cut.
That is just the first round of $900 billion in cuts.
In the second phase of the $2.5 trillion package, sweeping new powers are given to a 12-member, evenly-divided House and Senate super committee. The panel's mandate is to look at every federal government program and come up with $1.5 trillion more in savings. With Republicans and an increasing number of Democrats calling for major cuts in Social Security, Medicare and Medicaid, all of those programs will be in jeopardy.
If the committee is unable to agree, cuts will happen anyway. A sequestration process would require $500 billion in cuts to defense spending and $500 billion more in across-the-board cuts to domestic discretionary spending. In that scenario, Social Security, Medicare benefits and Medicaid would be spared, but even more draconian cuts would occur in programs that sustain working families.
There is a great irony in all this. The deficit deal does exactly the opposite of what the American people wanted. In poll after poll, the American people said they believe in shared sacrifice. Instead of putting Social Security, Medicare, Medicaid, education and environmental protection on the chopping block, overwhelming majorities say the best way to reduce the deficit is to end tax breaks for the wealthy, big oil, and Wall Street and take a hard look at military spending. What President Obama and Congress did, however was to let the wealthy and large corporations contribute nothing while making major reductions in services for working families and the most vulnerable people in our country.
Enough is enough! The American people must fight back. We need a government which represents all the people, not just the wealthy, campaign contributors and lobbyists. In these tough and discouraging times, despair is not an option. This fight is not just for us, it is for our children and grandchildren and for the environmental survival of the planet.
http://www.huffingtonpost.com/rep-bernie-sanders/why-i-voted-no-on-the-def_b_919461.html
http://fuelfix.com/blog/2011/07/26/want-to-find-out-who-makes-the-most-find-out-here/?appSession=490230455279225&RecordID=&PageID=2&PrevPageID=&cpipage=1&CPISortType=&CPIorderBy=
http://www.huffingtonpost.com/social/Terry_S_Singeltary_Sr/john-boehner-debt-ceiling-plan-republicans_n_908343_99045241.html
TSS
|
|
