Working tag
Duke & Davis 23 – Eli Byerly-Duke is a State Policy Analyst who monitors trends in state tax policy and conducts long-term research - Carl Davis is the research director at ITEP, bachelor’s degrees in both economics and political science from Virginia Tech and a Master’s in Public Policy from George Washington University, (“The Pitfalls of Flat Income Taxes”, 1/17/23, https://itep.org/the-pitfalls-of-flat-income-taxes/)//CG
States and localities raise most of their revenue through a mix of sales, excise, property, and income taxes. Among those levies, the income tax stands out as the only major tax that is structurally progressive.[2]
Property taxes on homeowners, rental property, and motor vehicles tend to affect low- and middle-income families most as a larger share of their net worth and income is tied up in these assets. Similarly, sales and excise taxes on the purchases that families make every day also affect low- and middle-income families most because they must spend most or all of what they earn to make ends meet, whereas high-income families have the luxury of spending only a small portion of their income each year. These regressive levies tend to worsen racial and economic inequality by taxing low-income people, a disproportionate share of whom are people of color, at higher rates than other families.[3]
This means that for states to meet even the barest standard of tax fairness—an overall state tax rate that asks at least as much from the wealthy as from others —they must have a progressive income tax that counteracts the regressive effects of other taxes.
Put another way, achieving flat taxation overall—where each income group pays a similar share of their income in taxes—requires having a graduated rate income tax. Ironically, flat income taxes run counter to the goal of a flat, or “proportional,” tax system more broadly.[4]