HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » Washington State's poor ...
Introducing Discussionist: A new forum by the creators of DU

Wed Jan 30, 2013, 02:21 PM

Washington State's poor pay 605% higher tax rate than top 1%.

‘Fundamentally Unfair’: How States Tax The Richest 1 Percent At Half The Rate Of The Poor

By Travis Waldron p

The poorest Americans are subject to a tax rate at the state and local level that is twice as high as the tax rate paid by the wealthiest earners thanks to “fundamentally unfair” state tax laws, according to a new report from the Institute on Taxation and Economic Policy (ITEP). Middle-class taxpayers also pay higher effective rates than the wealthy.
When state, local, property, and sales taxes are taken into account, the poorest 20 percent of Americans pay an average effective tax rate of 11.1 percent, the report found. The middle 20 percent pays a 9.4 percent rate, while the rate for the top 1 percent is just 5.6 percent. The lack of progressive income taxes and an over-reliance on consumption taxes are the primary culprit, the report says.

In the 10 most regressive states, the poorest 20 percent pay a rate as much as six times as high as the rate for the richest 1 percent. Four of those states — Washington, Texas, Florida, and South Dakota — have no income tax; one, Tennessee, has a limited income tax that only applies to dividends and interest. In these five states, half to two-thirds of revenue comes from sales and excise taxes, well above the national average of one-third.
..............................................


Still, Republicans across the country are pushing tax plans that would replace income taxes — typically the only form of progressive taxation at the state level — with sales taxes. Republicans in Nebraska, Kansas, North Carolina, and Louisiana have advanced such plans, even though their state tax systems are already regressive.

In Louisiana, worst of the four, the poorest 20 percent pay 9.2 percent of their income in sales taxes, while the wealthiest 1 percent pay just 1.3 percent. Even in North Carolina, the best of the four, the poor pay six times as much of their income in sales taxes as the richest one percent. Shifting to a tax code that relies solely on sales taxes would make these states even worse.

http://thinkprogress.org/economy/2013/01/30/1514461/states-tax-rich-half-poor/

19 replies, 2357 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread

Response to ErikJ (Original post)

Wed Jan 30, 2013, 02:27 PM

1. Wow. K n R

 

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 02:45 PM

2. K&R

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 03:15 PM

3. I try to point this out every time some dumbass points to sales taxes as a panacea.

Sales and use taxes, property taxes, no income tax, and fee for service are why Washington sucks as a place to be working class or poor.

Most of our tax revenue comes from those least able to afford it.

Jeff Bezos, Howard Schultz and Bill Gates live here because poor people will pay their taxes.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to lumberjack_jeff (Reply #3)

Wed Jan 30, 2013, 04:38 PM

7. +1

Reply to this post

Back to top Alert abuse Link here Permalink


Response to lumberjack_jeff (Reply #3)

Wed Jan 30, 2013, 04:48 PM

10. Sales taxes are needed in addition to very progressive income taxes.

Why? Because sales taxes are the only way to prevent placing a tax burden on products made in the USA that is not borne by products made in other countries.

Sales taxes are imposed in European countries, especially Germany to make sure that some of the costs of the social safety net are imposed on goods produced in other countries.

We do need more, not fewer, sales taxes. What we need to do is to use some of the sales taxes to pay for our social safety net -- for Medicaid and better education for example.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to JDPriestly (Reply #10)

Wed Jan 30, 2013, 04:54 PM

12. Whaa?

This would make some minimal amount of sense if and only if domestic products were exempt from sales taxes.

Sales taxes suck in every way.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to lumberjack_jeff (Reply #12)

Wed Jan 30, 2013, 07:46 PM

18. I would lower costs, or taxes on companies that hire American workers in their American businesses.


It would have to be done so as not to raise the complaint that it is protectionist. Germany does this. It is one of the reasons that Germany's economy is doing well compared to other European economies as well as our own.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 04:01 PM

4. Republican state legislatures generally pull out all stops to soak the poor while assiduously

protecting the wealthy and large corporations, a wholly corrupt and despicable practice antithetical to the doctrine of promoting the general welfare.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to indepat (Reply #4)

Wed Jan 30, 2013, 04:14 PM

6. LA Gov. Jindal is going to drop income tax and increase sales tax just days after his speech

that "we have to quit being the party that stops protecting the well-off" !

Reply to this post

Back to top Alert abuse Link here Permalink


Response to indepat (Reply #4)

Wed Jan 30, 2013, 04:55 PM

13. That isn't the case in Washington.

Our state supreme court has ruled that an income tax is unconstitutional, and the Democratic leadership lack the courage (or the support from the public) to fix it.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to lumberjack_jeff (Reply #13)

Thu Jan 31, 2013, 03:57 AM

19. Some believe the unconstitutional may not hold up today

http://dor.wa.gov/Content/AboutUs/StatisticsAndReports/WAtaxstudy/Appendix_B.pdf

However, you are unfortunately correct. The voters rejected I-1098 two years ago. Everyone thinks their Lotto ticket will hit, and they don't want the gumint taking any of their "hard earned money".

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 04:02 PM

5. voters won't accept an income tax

It is nuts! It is political suicide for any politician to suggest a change to an income tax in Washington.
This is really the fault of ignorant voters.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to KT2000 (Reply #5)

Wed Jan 30, 2013, 04:40 PM

8. I like being informed, too

but I think you're dancing around blaming the victim here. Where's the culpability for helping the populace stay informed? Media, anybody?

Reply to this post

Back to top Alert abuse Link here Permalink


Response to theaocp (Reply #8)

Wed Jan 30, 2013, 07:38 PM

17. the moneyed interests

do not want it. They use their media to tell the voters that there will be a "creep" of increases in income tax and sales tax if an income tax is adopted. They point being that there will be two sources to increase taxes rather than one.
As another poster pointed out, the voters rejected a bill that would have increased taxes only on the most wealthy.

Victims? There is evidence that voters will vote against their own interests if they are scared enough. That is not being a victim, that is being stupid, IMHO.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to KT2000 (Reply #5)

Wed Jan 30, 2013, 06:44 PM

16. Washington Rejects Income Tax Initiative on Wealthiest Residents-11/2/2010

I couldnt believe they rejected this initiative. It would have cut their property tax by 20% and raised the small biz tax credit.

Washington State Rejects Income Tax on Wealthiest Residents
By Alison Vekshin - Nov 2, 2010


Washington state voters rejected a ballot measure to impose an income tax on the wealthiest residents that pitted Bill Gates Sr. against Microsoft Corp., the company co-founded by his son.
The income-tax measure, Initiative 1098, failed 65 percent to 35 percent, with 59 percent of precincts counted, according to the Associated Press.
The elder Gates was a lead advocate for the proposal. Redmond, Washington-based Microsoft, the world’s largest software company with about 90,000 employees, opposed the plan.
The proposal would have imposed a tax on the adjusted gross income of individuals earning more than $200,000 and couples earning more than $400,000, beginning in 2012.
“Those to whom it would apply are people who have not been called upon to pay their fair share of the costs in the state,” Gates, 84, said in an Oct. 27 conference call with reporters.
Washington is one of seven states, including Florida and Nevada, that don’t have income taxes, according to the Denver- based National Conference of State Legislatures.
Brad Smith, Microsoft’s general counsel and senior vice president, said the measure would make it harder to attract employees and stifle job growth.
High Tax Rate
“This initiative would give Washington one of the top five highest state income-tax rates in the country,” Smith said in an Oct. 27 e-mailed statement.
Other opponents, including the Washington Farm Bureau and the Association of Washington Business, said the Legislature could extend the income tax to everyone after two years.
Bill Gates, co-founder of Microsoft and the richest American, supported the initiative.
The measure would have increased state revenue by $11.2 billion over five years that would have been directed to education and health services, according to the state’s Office of Financial Management. It would have cut the state portion of property taxes by 20 percent and would have raised the business and occupation tax credit to $4,800.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 04:41 PM

9. Well, the poor should hire better accountants.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 04:50 PM

11. The group that crunches these numbers is the Institute on Taxation & Economic Policy

You can see their full report including details for each state here:

http://www.itep.org/pdf/whopaysreport.pdf

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 04:56 PM

14. DURec

Reply to this post

Back to top Alert abuse Link here Permalink


Response to ErikJ (Original post)

Wed Jan 30, 2013, 06:28 PM

15. FLAT TAX IS NOT GOOD EITHER

 

I thought the tax on gasoline in California was HIGH, but this tax goes to pay for some excellent roads. The states without income tax have HIGH sales tax and other tax's to run their government. I can tell these people do not get much for their money.

I hope the people in those high sale tax states WAKE up and become more PROGRESSIVE and decide to have an income tax so the 1% pay their fair share. What about those states which have TOLL roads. In California the work FREEWAY is very popular.

I am glad after all these years California can finally balance the budget with a new 0.25% sales tax increase. We have to pay the bill or the state will become a third world area like some those state which do not have a state income tax.

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread