05 February 2012

The US has a regressive tax system

The rich pay a higher percentage of their income in taxes, right? Nearly half of Americans pay no taxes at all, right? Wrong. It's true as long as you're talking about federal income taxes, and ignoring overall tax rates that take into account local sales taxes, payroll taxes, state income taxes, property taxes, etc. etc. Some sobering statistics by way of Mother Jones:
... it's true that the federal income tax is indeed progressive. Conservatives are right about that—though it's not as progressive as it used to be, back before top marginal rates were lowered and capital gains taxes were slashed in half. But conservatives are a little less excited to talk about other kinds of taxes. Payroll taxes aren't progressive, for example. In fact, they're actively regressive, with the poor and middle classes paying higher rates than the rich.

And then there are state taxes. Those include state income taxes, property taxes, sales taxes, and fees of various kinds. How progressive are state taxes?
Answer: They aren't. The Corporation for Enterprise Development recently released a scorecard for all 50 states, and it has boatloads of useful information. That includes overall tax rates, where data from the Institute on Taxation and Economic Policy shows that in the median state (Mississippi, as it turns out) the poorest 20 percent pay twice the tax rate of the top 1 percent. In the worst states, the poorest 20 percent pay five to six times the rate of the richest 1 percent. Lucky duckies indeed. There's not one single state with a tax system that's progressive. Check the table below to see how your state scores.




So when conservatives are playing the world's saddest song on the world's tiniest violin, bitching and moaning about a 3% increase in federal income tax rates on the top 2% or saying that we should slash medicare, medicaid, social security and welfare before we even consider taxing the rich more, just show them this while you hand them a spoon and a bag of dicks.

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