Putting an end to regressive taxation in each state

It’s a simple fact that all fifty states in our great union have a regressive tax system. For those that don’t know, regressive tax systems hurt the poor and middle class more compared to the wealthiest Americans.  

While politicians in Washington D.C. fight over the best way to tax an individual on the federal level, what can be done in our 50 states to make their tax codes less regressive? 

{mosads}The state of Oregon ranks as the third least regressive state in the country according to the 2015 study ‘Who Pays’ by the Institution on Taxation and Economic Policy.  Just north of Oregon, Washington State is rated as the number one most regressive state in America.  

Under Washington’s current tax code, the bottom 20 percent of taxpayers in the state pay 16.8 percent of their annual income in taxes, while taxpayers in the top one percent pay 2.4 percent of their income each year in taxes.  

Washington State has no income tax, but they sport one of the highest sales tax rates in the country.  When we look at Oregon’s tax code, the bottom 20 percent of taxpayers in the state pay 8.1 percent of their annual income in taxes, while taxpayers in the top one percent pay 6.5 percent.  

Although Oregon has one of the higher income tax rates in the country, they don’t have a sales tax.  In order to ease the burden on the lower and middle class, should other states adopt a tax code like Oregon? 

Between 1979 and 2012, the top five percent of American families saw their real incomes increase 74.9 percent, according to Census data. Over the same period, the bottom 20 percent saw a decrease in real income of 12.1 percent. 

Creating a new tax code with a bottom-up approach will help reduce the income gap in each state. We’ve seen cities and states across the country try to combat poverty and low wages with other methods such as raising the minimum wage. Those policies just haven’t worked.   

Eliminating the sales tax in each state would especially ease the burden on small business. It would allow the business to not be a tax collector for the government anymore.  

There are organizations forming across the country attempting to eliminate their state’s sales tax. One example is in Missouri where they have an organization called ‘No MO Sales Tax.’  

Is this a bold approach to cutting taxes? Yes. Is this something that the majority of Americans haven’t seen before? Absolutely! Let’s move forward and adopt a tax code in each state that truly is a fair tax.

Newman is an engagement strategist at Hare in the Gate Productions and InfinityBox Press in Portland, Oregon.