A national study says state and local taxes take a bigger chunk of income from middle-class and poor Wisconsin families than rich ones.
The Institute on Taxation and Economic Policy in Washington says the richest one percent of Wisconsin taxpayers paid about eight percent of their income in state and local taxes last year. Nearly six percent after federal itemized deductions.
By comparison, those earning between $30,000 and $48,000 paid nearly 12 percent -- or 11 percent after the deductions.
The poorest 20 percent of taxpayers with incomes of less than $18,000 paid a little more than ten percent in state and local taxes. They were relatively unchanged with federal deductions.
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An Analysis of the Tax Systems in all 50 States
By an overwhelming margin, most states tax their middle- and low-income families far more heavily than the wealthy, according to a new study by the Institute on Taxation & Economic Policy.
Nationwide, middle-income families pay almost 10 percent of their earnings in state and local taxes and poor families pay more than 11 percent. But the richest people effectively pay only 5.2 percent of their income in state and local taxes.
Since 1989, state and local taxes have risen on low- and middle-income taxpayers, but have fallen on the very wealthiest.
Ten states — Washington, Florida, Tennessee, South Dakota, Texas, Illinois, Michigan, Pennsylvania, Nevada, and Alabama — are particularly regressive. These “Terrible Ten” states ask poor families — those in the bottom 20 percent of the income scale — to pay up to 5.5 times as great a share of their earnings in taxes as do the wealthy. Middle-income families in the “Terrible Ten” states pay up to 3.5 times as high a share of their income as the wealthiest families.
The least regressive states are Delaware, Montana, Vermont and California. These states have progressive personal income taxes and/or low reliance on sales and excise taxes.
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