Tax season has arrived, and Americans across the country are looking at their income and expenses from the past year. With that evaluation often comes reflection of the tax system. Why is it this amount? Why is this system being utilized here?
It’s a time of year where advocates for greater tax distribution have a larger platform. Many start looking at the way taxes are distributed across the country, by wealth and other factors, to see if there is room for improvement.
Nationally, one-percenters pay around 7.2% of their income in state taxes, while the least-wealthy fifth of Americans pay around 11.4%, according to WalletHub.
A new study from WalletHub, a personal finance site, evaluated which states place the most tax burden on their lower-income populations during tax season.
States with worst low-income tax burden
The majority of taxes are regressive, meaning the rate stays the same regardless of an individual’s tax bracket. This places greater emphasis on the less-wealthy taxpayers, who are paying a larger portion of their yearly income. Property and sales taxes are generally regressive, while state and local taxes vary.
So where is this tax burden alleviated most, out of all 50 states and the District of Columbia?
According to the study, Alaska has the smallest tax burden for low-, middle- and high-income tax burdens, who pay 6.93%, 4.98% and 3.85% of their incomes respectively.
Washington ranked second-worst in conditions for low-income taxpayers, who pay about 13.91% of their income. The only state below the Evergreen State in this metric was Illinois.
Hawai’i has the greatest tax burden for middle-income earners, who pay 13.62% of their income. Washington is just a few steps above at 47 of 51, paying 11.96% of their income.
The worst state for high-income earners is New York. Washington falls near the middle of the road at 21, paying 8.98%.
WalletHub then determined the state with the worst overall tax burden between the rich and poor as Washington .
