Overview

The usual objection to raising taxes on the wealthy or corporations is that such taxes undermine economic growth; yet there is remarkably little evidence to back up those claims.  Studies instead have emphasized that neither business tax cuts [1] nor estate tax cuts [2] play any significant role in local economic growth.

Instead, the sad truth is that almost every state tax system requires working families to pay a higher percentage of their income in taxes than their wealthier citizens.  In fact, as the Institute on Taxation & Economic Policy detailed in their 2003 study, Who Pays?: [3] "[O]nly four states require their best-off citizens to pay as much of their incomes in taxes as middle-income families have to pay."  As the graph below from ITEP shows, the average family pays significantly more of their income in state taxes than the wealthy.

A report [4] by the Center on Budget and Policy Priorities and EPI emphasizes that making state tax systems more progressive is also a way to mitigate the broader trend of growing before-tax economic inequality. 

Core Policies to Make Tax Systems More Progressive include:

• Promote Fair Income and Estate Taxes [5]
• Reform Property Taxes [6]
• Broaden Sales Taxes to Include Services [7]
• Make Corporations Pay Their Fair Share [8]
• Better Enforcement of Tax Law [9]
• Tax Disclosure [10]
• Stop Rightwing Tax Campaigns [11]

General Resources to Make Tax System More Progressive

• Institute on Taxation and Economic Policy (ITEP) - Guide to Fair State and Local Taxes [12]
• ITEP - Who Pays? A Distributional Analysis of the Tax Systems in All 50 States [3]
• Progressive States Network, Raising Revenue Through Fair Taxes [13]
• Progressive States Network - Dos and Don'ts of Coping With State Budget Crises [14]
• Economic Policy Institute - Rethinking Growth Strategies [15]
• Center on Budget and Policy Priorities and EPI - Pulling Apart: A State-by-State Analysis of Income Trends [4]