Local government taxes Essay Example | Topics and Well Written Essays - 1250 words

Local government taxationes - turn out ExampleThe poorest twenty percent of Americans, on average, pay a combined local and state tax rate of eleven percent go those in the wealthy bracket only pay quint and a half percent. This disparity becomes even more pronounced in the Washington State, which possesses the most regressive system of tax with the poorest twenty percent paying an average rate of seventeen percent while the wealthy families pay only 2.3%. What are the most regressive and progressive states? Progressive States The most standout peculiarity of regressive tax states is the progressive nature of income taxes and less reliance on fret and sales taxes. Vermont taxes, for example, are among the least regressive in the US due to their highly progressive income tax and decreased excise and sales taxes (Davis et al 3). Vermonts tax system is also rendered as a little below the belt because of the refundable EITC. Delawares income tax regime, however, is not progressiv e, but the high reliance it has on income taxes and low utilization of manipulation taxes makes its tax system only slightly regressive. The District of Columbia and New York have each achieved a tax system that is close to humdrum overall via the use of generous EITCs, as well as an income tax that has relatively high top rates (Davis et al 3). However, it should be noted that the least regressive states as far as tax policy is concerned generally still fail to date the criteria that most people would consider as a minimal standard of tax fairness. In these states, nearly middle or low-income groups truly pay more local and state income tax than the wealthy actually do. New Jersey is another of the progressive states with their legislature passing a millionaires tax, which was vetoed however, by the regulator for the third straight year. The revenue raised from this would have helped offset property tax decreases for middle class. Finally, Rhode Island came up with an innovati ve tax idea to reduce incrementally corporate taxes to companies that created employment over a 3-year period in the state, which was a progressive move. Regressive States On the other side, of the tax regimes are ten states that have curiously regressive state and local taxes. These include Alabama, Pennsylvania, Nevada, Arizona, Illinois, Texas, Tennessee, South Dakota, Florida, and Washington. In these states, residents with lower income are asked to pay to the highest degree six times as much income tax as their wealthier counterparts. Middle-income families residing in these states have to pay common chord times the share of their income when compared to the wealthier families. In a majority of these states, including Nevada, Tennessee, South Dakota and Washington, personal income taxes are not levied on a broad base. The rest of these states, including Illinois and Alabama, do levy income tax, although their income tax is structured in a course that makes them less progres sive than, for example, New York and other progressive states. Illinois and Tennessee have an income tax at a flat rate, which taxes the wealthy using similar marginal rates to those used in taxing the poor salary earners. Nevada, Tennessee