State and local taxes are making the rich even richer, according to a new analysis
“State and local taxes effectively redistribute national income from the poor to the very rich, according to data released this week by the Institute on Taxation and Economic Policy (ITEP), a progressive think tank. Many state and local governments are heavily reliant on sales taxes, rather than income taxes. Lower-income households tend to spend a greater fraction of their earnings on purchases, including necessities like food and transportation, than higher-income households do. As a result, sales taxes take a bigger bite, percentage-wise, from the paychecks of low-income households than high-income ones.”