Financial research organization WalletHub has undertaken a study comparing all 50 states based on the fairness of their state/local taxes. The analysis includes income taxes, sales & excise taxes and property taxes. In order to rank the states, Wallethub undertook a nationwide online survey of 1,050 Americans asking them what they think a fair state and local tax system looks like. The rankings presented below when analysts compared what Americans think is fair to the actual structure of tax systems in all 50 states.
Montana most fair, Washington least fair state/local taxes
According to the WalletHub rankings, Montana is clearly the state with the fairest state and local tax system. Montana came in No. 1 in the overall rankings and was rated the fairest by both those who identified as political conservatives and liberals. Oregon came in second overall on the list, and was rated third fairest by liberals and fourth fairest by conservatives. South Carolina was ranked third overall, and liberals felt it was the second fairest state/local tax system and conservatives rated it as the third fairest.
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Washington has the most unfair state/local taxes, as it was ranked 50th in all categories. Hawaii and Arkansas were ranked 49th and 50th respectively.
Clear evidence the U.S. political system captured by the rich
The WalletHub survey also serves to make it very clear how much the U.S. political system has been co-opted by the wealthy. The large majority of Americans feel a fair state and local tax system should tax wealthy households more than lower income households, but the reality is the opposite.
As the report points out: “Although conservatives appear to support higher taxes on the poor and lower taxes on the rich, the general trend is the same: all Americans believe a fair state and local tax system taxes wealthy households at a higher rate than lower- and middle-income households.”
But despite this fact, “We see here that the real relationship between household income and state and local tax burden is negative—as income goes up, state and local tax burden goes down—the exact opposite of what Americans think is fair.”
The real question here is why do lower- and middle-class voters continue to elect politicians that are passing laws that favor the wealthy?