State Taxes Are Wildly Regressive
Some indigestible food for thought: there is not a single state in the Union—not one—in which the top 1% of income earners pay a higher rate of state taxes than the bottom 20%. For the majority of states, it’s not even close: the poorest 20% pay somewhere between double and six times the tax rate of the richest 1%. In Florida, those who make the least pay 13.5% of their income in state taxes, while those who make the most pay 2.1%.
This comes to us from Mother Jones’ Kevin Drum, who dug into the comprehensive “Assets and Opportunity Scorecard” recently produced by the The Corporation for Enterprise Development.
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This is all the more reason to abolish the FICA tax.
Or perhaps another reason why federal aid to states is such a critical part of countercyclical policy in the US (or rather, should be). Presumably many states made up their crisis-induced budget shortfalls with tax increases as well as spending cuts—which means increases in some particularly regressive taxes.
States also rely on lotteries and other gambling rackets to raise revenue, which are exploitative scams to trick the most needy people to into throwing their money away on desperate hopes of a big score.