State Tax System Unfair in the USA

September 16, 2014 Taxation in USA

Income TaxesWASHINGTON D.C. – Taxes in many states of the USA are unfair, and do not correspond to taxpayers’ perceptions of how a tax system should be set up.

On September 15th the independent US-based consumer group Wallet Hub released the results of a new survey on the perceived fairness of tax systems in the states of the USA, showing that individual taxpayers believed that local and state taxes should be progressive, with the well-off paying a higher portion on taxes.

According the results of the survey, the states with tax systems which most correspond with taxpayers’ perception of a fair tax system are Montana, Oregon, South Carolina, and Delaware, while the least fair systems were found to be in Washington, Hawaii, Arkansas and Illinois.

The perceived unfairness of a tax system was judged by whether the top 1 percent of earners were perceived to be undertaxed, and whether middle and low-income earners were overtaxed, compared to the ideal level of taxation described by the respondents of the survey.

The experts of Wallet Hub also found that while taxpayers called for a progressive tax system, the actual tax obligations imposed on taxpayers was strongly regressive, with top income earners paying significantly less taxes than low income earners.

Photo By: Chris Potter