How Red State Tax Policy Assaults the Poor and Middle Class

Want to live in a red state that has no income tax? No income tax?! That sounds great!... Guess what, if you are not in the top 1% making an average income of $1,827,000 it sucks. Red states with no income tax implement other regressive taxes that take a much greater share of income from low and middle-income families to finance their state government.  


It is no coincidence that the states with the most regressive tax system have no income tax at all. Most income tax systems are designed to be progressive, which means the more money you make the higher your tax burden. States with no state income tax raise revenues through sales and excise taxes which are highly regressive. Since poor and middle-class families essentially spend every dollar they make, 100% of their income is subject to sales and excise taxes. Additionally, since many poor families have to go into credit card debt to finance basic purchases, they pay tax on income that they haven’t even made yet. Meanwhile a wealthy family that spends only 10-20% of their income, will only pay tax on that 10-20%. In fact, poor families pay almost 8 times more of their income to these regressive taxes than wealthy families.

When you look at the tax burden by income group in these regressive states the details are disturbing. Here are some facts from a few of the most regressive states in the country:
  • In Florida the POOREST 20% of the population pay 12.9% of their income to fund the state. Meanwhile the RICHEST 1% only pays 1.9% of their income to fund the state.
  • In Texas the POOREST 20% of the population pays 12.5% of their income to fund the state. Meanwhile the RICHEST 1% only pays 2.9% of their income to fund the state.
  • While 8 out of the 10 most regressive states have Republican governors, red states are not alone in their implementation of regressive tax policy. Washington state, which has voted blue since Dukakis, ranks as the most regressive state in the country with the poorest 20% of the state paying 16.8% of their income to fund the state while the richest 1% are only paying 2.4% of their income.

The people who have benefited the most from our society should be paying the highest burden, not the lowest. Why are the wealthiest members of these states, who are already essentially exempt from ever serving in the military, only paying 2% of their income to fund the state, while the poorest members of the state are forced to sacrifice nearly 17% of their income. 

We need to end these regressive unfair tax systems.

*All facts and figures are from the Institute on Taxation and Economic Policy (ITEP)*

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