NEW YORK: California makes the list of seven states with the most fair taxes across the land. California has one of the least regressive tax systems due to its heavy reliance on a very progressive income tax. California is not an easy place to do business. Taxes and regulations are legendary.
But the nonpartisan Institute on Taxation and Economic Policy this month released its fifth “Who Pays?” report. And the Golden State ends up nearly on top when it comes to the fairness of taxes for a state’s residents.
The report says it measures “the state and local taxes that will be paid in 2015 by different income groups as a share of their incomes.”
The institute gives high scores for states with progressive taxes as incomes go up, effective tax rates go up”—and low scores for those with regressive systems—those where taxes hit lower-income folks harder.
An example of a regressive tax is at the grocery store. If you’re poor, that extra few dollars tacked onto your grocery bill might have been your lunch money. For the rich, not so much.
The institute discounts the theory of trickle-down economics, by which the rich get richer via tax breaks but invest that cash in businesses and jobs.
