4/16/2024 0 Comments 2021 vermont income tax brackets![]() ![]() Six of these states do not levy broad-based personal income taxes while two levy flat-rate taxes. Heavy reliance on these taxes is largely a function of these states’ decision not to levy robust personal income taxes. As a group, these eight states derive more than half of their tax revenue from these taxes, compared to a national average of about one-third. Heavy reliance on sales and excise taxes makes tax systems more regressive.Eight of the 10 most regressive states rely heavily on sales and excise taxes.After Florida, the next most regressive tax codes can be found in Washington, Tennessee, Pennsylvania, Nevada, South Dakota, Texas, Illinois, Arkansas, and Louisiana. In the 10 states with the most regressive tax structures, the lowest-income 20 percent pay three times as much of their income in taxes as the wealthiest 1 percent.In Florida, home to the nation’s most regressive tax system, low-income families pay almost five times as much as the wealthy.Those states are California, Maine, Minnesota, New Jersey, New York, and Vermont. Tax structures in six states and the District of Columbia reduce inequality.These half dozen states, plus D.C., narrow the gap between lower- and middle-income taxpayers and upper-income taxpayers, making the distribution of income more equal after collecting state and local taxes. ![]() Tax structures in 44 states exacerbate inequality.Most state and local tax systems worsen income inequality by making incomes more unequal after collecting state and local taxes.Those states are Maine, Minnesota, New Jersey, New Mexico, New York, and Vermont. Only six states and the District of Columbia now reserve their lowest overall tax rates for low-income families. Nationally, comparatively high tax rates on low-income families remain the norm, despite recent steps to lower taxes for this group by bolstering refundable tax credits. ![]() Six states plus D.C., on the other hand, tax low-income families at lower rates.
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