Report: Washington still has least-fair tax system in country; hits the poor six times harder than the wealthy
The beauty of a tax system is always in the eye of a beholder, and some business rankings say Washington state’s business climate is good partly because of its lack of an income tax. But a report by the nonpartisan Institute on Taxation and Economic Policy rates Washington state’s system as the worst in the country in terms of how much harder it hits the poor and middle-class than the rich. Lack of an income tax is a clear factor.
ITEP, based in Washington, D.C., found that all states’ tax systems are actually weighted in favor of the wealthy. In other words, those well off pay a smaller share of income in state and local taxes than do the poor. But Washington was at the top of what ITEP calls the “Terrible Ten.”
“In these ‘Terrible Ten’ states, the bottom 20 percent pay up to six times as much of their income in taxes as their wealthy counterparts. Washington State is the most regressive, followed by Florida, South Dakota, Illinois, Texas, Tennessee, Arizona, Pennsylvania, Indiana, and Alabama,” the report’s executive summary states.