The mistake made most often in discussion of tax burdens for this or that segment of the population is to focus on federal income taxes and ignore payroll taxes. Probably the second most frequent mistake is to focus on federal taxes and ignore state and local taxes.
As Kevin Drum notes today, the data on state tax burdens, as illustrated by a new report from the Corporation for Enterprise Development, shows a sea of regressivity, particularly in states that rely disproportionately on consumption taxes and property taxes that are levied at flat rates on assets that are disproportionately limited for those at or near the bottom of the income scale. I’m not sure the rankings Kevin cites are truly definitive, in that they may not reflect targeted tax credits, sales tax exemptions, or other offsets aimed at cushioning the burden. But the overall picture is a grim confirmation of the fact that the limited progressivity of federal taxes must be weighed against the unwillingness or inability of most of the states to follow suit.
This is a useful reminder at a time when conservatives are so hell bent on making federal taxes considerably more regressive to liberate those poor, overtaxed job creators to whom the rest of us entirely owe our daily bread. Proposals to make federal income taxes “flatter” will simply make overall levels of taxation regressively worse.
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