While reading a very good article about Rick Perry by Jonathan Chait, I came upon this amazing report by the Institute on Taxation and Economic Policy (ITEP), Who Pays? 5th Edition (pdf) — that’s the 2015 version of the report. What’s interesting about the report is how it looks at how much money is paid in taxes by people in different income groups. In general, people present it as total amounts. But that isn’t fair because (obviously) the rich make more than the poor. So the report looks at the percentage of the income that each group pays in taxes. And the results are astounding.
We’ll get to the individual states in a moment. But even taking into account all of the states — including the supposedly liberals ones — ends with the result that the more money people make, the less they pay in state and local taxes. The lowest 20% of income earners in the nation pay 10.9% of their income in state and local taxes. The top 20% of income earners pay just 7.5%. So as a percentage of their incomes, the lower class pays almost 50% more than the upper class. It’s even worse when they look at the top 1% of earners. They pay only 5.4% in state and local taxes. That means the lower class pays over twice what the rich pay.
The situation is far worse in individual states. That shouldn’t be surprising. What was going on in Ferguson was just an especially egregious example. What I’ve seen everywhere is that taxes that hit the rich are rolled back, only to be replaced by flat or regressive taxes. And this is not just a red state problem, because the neoliberals are often even worse than the conservatives. The ten most regressive states are (from worst to least worst): Washington, Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Arizona, Kansas, and Indiana. That’s three blue states, and two of them are in the top five.
In Washington, the bottom 20% pay an average of 16.8% of their income in state and local taxes. The top 1% pay only 2.4%. That means the lower class is paying seven times what the rich are paying. Evening looking at lower class and the middle class is terrible: the lower class is paying two-thirds more in taxes than the middle class. The situation in the least worst state, Indiana, looks pretty good, but only in comparison: the lower class only pays 2.3 times what the rich pay. But in that case, it’s almost as bad for the middle class who pay just over twice what the rich pay. How does this happen? It happens by instituting regressive taxes. The best way to do that is to have no income tax and depend heavily on consumption taxes. Of the ten most regressive states, they either have little or no income tax, a flat tax, or a low top tax rate.
The least regressive states are: District of Columbia (DC), Vermont, Minnesota, Delaware, Montana, Oregon, and California. Those are more or less in order, but it does depend upon how you calculate it; I’ve just compared the lower class to the upper class. What’s interesting is that by this measure, only DC is progressive; the others are all regressive to one extent or another. And DC is quite regressive when comparing the middle class to the upper class. But these states manage to not be too bad mostly because they have progressive income taxes, tax credits, and low use fees.
The one thing that I wish people would take away from the report is this graph:

What it shows is that both use and property taxes are particularly regressive. Only the income tax is modestly progressive (and hardly even that when you look at the middle class). But all you ever hear conservatives talk about is the income tax. This is a con. They know that the tax system is stacked against the poor in a big way on every tax but the income tax. But they’ve managed to fool the whole country into thinking of taxes just in terms of the income tax.
And this is what allows there to be a steady whine coming from Fox News and CNBC about how badly the rich are treated. Well, look at “Who Pays?” It’s bad enough that the poor are screwed by the tax system. But we also have to listen to rich complain about how much they suffer. It’s unbelievable.
The roots of the crisis lie far away from Greece; they lie in the architecture of European banking. When the euro came into existence in 1999, not only did the Greeks get to borrow like the Germans, everyone’s banks got to borrow and lend in what was effectively a cheap foreign currency. And with super-low rates, countries clamoring to get into the euro, and a continent-wide credit boom underway, it made sense for national banks to expand private lending as far as the euro could reach.
Did Jeb Bush really mean to say that Americans need to work more hours? It’s hard to say. But as
I remember during the 1988 DNC, there was conflict. Jesse Jackson got almost 30% of the popular vote. Michael Dukakis did not intend to have Jackson be a major part of his campaign. And so there was a meeting between Jackson and Dukakis. And Jackson came out of the meeting talking about how they had had a substantial discussion about important issues. And it was pretty clear that what he got was nothing. He was putting on the best face in a bad and extremely embarrassing situation. I felt bad for him and I was a Dukakis supporter. Wasn’t there any way that all those smart people in the Democratic Party could come up with a better way to support the man that came in a very good second place? (Dukakis only got 42% of the vote.)
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