Democratic Diva

10 Jan 2010 04:13 pm
Posted by: Donna

The brain trust of trickle down true believers who run AZ are still proposing tax cuts as the magical cure for our woes. In addition to the tax cuts on businesses, GOP legislators are calling for yet another cut in income taxes and the permanent repeal of the state property equalization tax. And Governor Brewer is expected to push for the sales tax referendum in her upcoming State of the State speech.

I was looking around for information on state and local taxation and came across this piece on Too Much, an online publication that explores and exposes wealth inequality and the excesses of the super-rich. Sam Pizzigati makes a convincing case that tax cuts have not led to prosperity for the vast majority of Americans. Read his piece and then read the report from the Institute on Taxation & Economic Policy he cites in it: Who Pays? A Distributional Analysis of the Tax Systems in All 50 States.

The study’s main finding is that nearly every state and local tax system takes a much greater share of income from middle- and low-income families than from the wealthy. That is, when all state and local income, sales, excise and property taxes are added up, most state tax systems are regressive.

Fairness is, of course, in the eye of the beholder. Yet almost anyone would agree that the best-off families should pay at a tax rate at least equal to what low- and middle-income families pay. Virtually every state fails this basic test of tax fairness: as this study documents,
only two states require their best-off citizens to pay as much of their incomes in taxes as their very poorest taxpayers must pay, and only one state taxes its wealthiest individuals at a higher effective rate than middle-income families have to pay.

Really, would simple parity between the upper and lower classes in taxation be too much to ask? Of course it would, you sillies! The middle class and the poor must pay a larger share of their income in order to ensure that the ruling class will strew job creating fairy dust across the land…

Eye roll.

Particularly noteworthy in the study is how states with little to no income tax figure prominently at the top of the regressive list. Remember that the next time some yob tells you we should get rid of our income tax.

Here’s how Arizona looks (on page 20 of the ITEP pdf):

By comparison the national average is 10.9% effective state and local taxes for the lowest earners and 5.2% for the highest. Don’t you feel all special knowing that we’re above average at something?

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