Forty-four of 50 US states worsen inequality with ‘upside-down’ taxes (2024)

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Forty-four of 50 US states worsen inequality with ‘upside-down’ taxes? ›

The Guardian: Forty-Four of 50 US States Worsen Inequality with 'Upside-Down' Taxes. A total of 44 of the 50 US states worsen inequality by making the wealthy pay a lesser share of their income in taxes than lower income people, a new analysis has found.

Gini index values by state

New York (Gini index = 0.5208), Connecticut (0.5008), Massachusetts (0.4975), California (0.4953), and Louisiana (0.4915) were the states with the highest Gini coefficients in 2022; Washington, D.C. (0.5111) had the second largest value, behind only New York.

New Orleans has the highest income inequality of major U.S. cities. While the highest earners make 7.8 times as much as the lowest earners in New Orleans, they still earn lower than average ($110,800) when compared to other cities.

In most states, 36 in all, the poorest residents are taxed at a higher rate than any other group. The most regressive states in terms of taxation are, in order, Florida, Washington, Tennessee, Pennsylvania and Nevada. The least regressive jurisdictions are DC, Minnesota, Vermont, New York and California.

The vast majority of state and local tax systems are upside-down, with the wealthy paying a far lesser share of their income in taxes than low- and middle-income families. Yet a few states have made strides to buck that trend and have tax codes that are somewhat progressive and therefore do not worsen inequality.

While pre-tax income is the primary driver of income inequality, the less progressive tax code further increased the share of after-tax income going to the highest income groups.

The states with the highest median household income are Maryland, New Jersey, and Massachusetts. The states with the lowest median household income are Mississippi, West Virginia, and Arkansas.

In 2021, households with a White householder made up 65.3% of all U.S. households and held 80.0% of all wealth.

You need more money than ever to enter the ranks of the top 1% of the richest Americans. To join the club of the wealthiest citizens in the U.S., you'll need at least $5.8 million, up about 15% up from $5.1 million one year ago, according to global real estate company Knight Frank's 2024 Wealth Report.

How much do you need to earn to be in the top 5% income bracket? For those in the top 5%, the figure rises even more. According to the same research, those in the top 5% earned an average of $335,891 in 2021. This is an increase of around $19,000 from the previous year.

Which US state has worst taxes? ›

California has the highest individual income tax burden, while seven states (including Texas, Florida and Washington) have the lowest. Washington has the highest sales and excise tax burden, while New Hampshire has the lowest. Red states have a lower tax burden than blue states, on average.

America's federal tax system overall is relatively progressive, meaning it requires the rich to pay more relative to their income than others, while state and local taxes in most states are regressive, meaning they take a larger share of income from the poor than from the rich.

That said, the average flip tax in the city is approximately 2%. This fee is typically calculated in one of four ways: a percentage of the gross sale price, a fixed dollar amount per share (in the case of co-ops), a flat fee, or a percentage of capital gain.

A tax inversion is a corporate reorganization and as such may take on many different forms. The most common format is a statutory merger between a domestic and foreign corporation that would be tax-free at the corporate level organization pursuant to section 368 of the Internal Revenue Code.

In economics, a negative income tax (NIT) is a system which reverses the direction in which tax is paid for incomes below a certain level; in other words, earners above that level pay money to the state while earners below it receive money, as shown by the blue arrows in the diagram.

Our results point to extreme levels of inequality in India compared to international standards. In 2022-23, 22.6% of national income went to just the top 1%, the highest level recorded in our series since 1922, higher than even during the inter-war colonial period.

South Africa had the highest inequality in income distribution in 2023 with a Gini score of 63. Its South African neighbor Namibia followed in second.

The official poverty rate in 2022 was 11.5 percent, with 37.9 million people in poverty. Neither the rate nor the number in poverty was significantly different from 2021 (Figure 1 and Table A-1). The official poverty rate for Black individuals decreased between 2021 and 2022.

Before accounting for taxes and transfers, the U.S. ranked 10th in income inequality; among the countries with more unequal income distributions were France, the U.K. and Ireland. But after taking taxes and transfers into account, the U.S. had the second-highest level of inequality, behind only Chile.