Who Pays a Greater % of their Income in State Taxes?

[Dardedar]

Thanks to Larry W. for passing this along.

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A Distributional Analysis of the Tax Systems in All 50 States

"When all Arkansas taxes are totaled up, the study found that:

* Arkansas families earning less than $15,000—the poorest fifth of Arkansas non-elderly taxpayers—pay 12 percent of their income in Arkansas state and local taxes.

* Middle-income Arkansas taxpayers—those earning between $26,000 and $42,000—pay 11.7 percent of their income in Arkansas state and local taxes.

* But the richest Arkansas taxpayers—with average incomes of $911,500—pay only 6.8 percent of their income in Arkansas state and local taxes."

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.

The 10 Most Regressive Tax States

Ten states — Washington, Florida, South Dakota, Tennessee, Texas, Illinois, Arizona,
Nevada, Pennsylvania, and Alabama — are particularly regressive. These ten states ask
their poorest residents — those in the bottom 20 percent of the income scale — to pay
up to six times as much of their income in taxes as they ask the wealthy to pay.

More, including the link to the PDF of the study here.

State by state break down here.

[L.Wood]

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The ruin of Reaganomics
You should be mad at the successful marketing of Republican 'supply-side' mythology.
by David Cay Johnston
Ark Times, April 13, 2011

For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity—so much so that tax revenues will go up, despite lower rates. The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman's ideas and made them into policy when he was elected president in 1980.
....
You would think that whether this grand experiment worked would be settled after three decades. You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict, the way Galileo and Copernicus did when they showed that geocentrism was a fantasy because Earth revolves around the sun (known as heliocentrism). But economics is not like that. It is not like physics with its laws and arithmetic with its absolute values.
...
The Mad Men who once ran campaigns featuring doctors extolling the health benefits of smoking are now busy marketing the dogma that tax cuts mean broad prosperity, no matter what the facts show.
LINK to ARK TIMES article

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[L.Wood]

This is a great thread Darrell. Thank you.

Recall during post WWII America's top tax rates on individuals went to 91% and stayed there until Kennedy lowed them to 77% in
1963.

During this time we built the largest interstate highway system in the world; the largest housing boom any nation had seen;
the most schools, bridges, churches, and shopping centers any nation had ever developed. We also built the largest military strength in the world. So when a wingnut tells you taxes kill investment and job creation remind them of our 65 year old history.

Top tax rate fell to 50% under Reagan. Today it's 33% but very few outside of lottery winners pay that rate.

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[Dardedar]

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"You would think that whether this grand experiment worked would be settled after three decades."
LINK to ARK TIMES article

DAR
You would think. This note and link from factcheck.org need to be in this thread:

"The Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation, the White House’s Council of Economic Advisers and a former Bush administration economist all say that tax cuts lead to revenues that are *LOWER* than they otherwise would have been – even if they spur some economic growth."

Supply Side spin... Factcheck .org

Just today someone on Huff Po was listing the top rates during presidencies and claiming the top rate during Reagan was 28%. I looked it up and added this important context:

"Only in 1988 and 1989 (Ronald Reagan's final 13 months in office) was the TOP MARGINAL rate down to 28%. It was 69.13% when he went into office, and went from 69.13%-50% from 1981-1986, then 38.5%, then 28%.

Barack Obama has proposed a top marginal tax rate of 39.6%, which was the rate under Bill Clinton. So with the exception of 13 months of Reagan's time in office, Obama's rate is lower than Reagan's." LINK