Though the predatory nature of capitalism has helped to create the greatest amount of wealth inequality in human history, government taxation policies are also contributing to the enormous income inequality in the U.S., forcing the poor to pay twice as high a percentage of their income in taxes as the rich.
The culprit is the state and local taxes Americans pay on top of the federal taxes. While the federal taxes are relatively progressive, meaning they take a higher percentage from the wealthy than they do the poor and therefore try to address poverty and inequality, the federal efforts are swamped by state and local taxes that take much more from the poor. The regressiveness of state and local taxes was the subject of a new report released this week by the Institute on Taxation and Economic Policy.
This is a huge issue for the nation—not just because it is incredibly unfair but also because it is also slowly destroying state budgets across the U.S. The more income that goes to the wealthy, the slower a state’s revenue grows. Atlanta Blackstar