Regressive local and state taxes hit the poorest the hardest

A new study from the Institute on Taxation and Economic Policy indicates that the tax burden imposed by local and state governments is frequently regressive, taking a larger proportion of income from poorer people.

While the exact figures vary considerably by state, the average person in the lowest quintile of income earners loses 10.9 percent of their income to local and state taxes, while the richest 1 percent lose just 5.4 percent. Much of this disparity comes from the fact that low-income families must spend a higher proportion of their income on basic necessities than those with money to burn, so local sales and excise taxes apply to a wider proportion of their expenditures.

If you'd like to avoid regressive tax rates, the report ranks Delaware — which has no state sales or income tax — as the fairest state in the nation. Washington state ranks the worst, with the poorest paying a whopping 16.8 percent of their income and the wealthiest just 2.4 percent.

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