What's the Matter with Washington State?

[hfojvt]

103. a negative tax rate

means that the average person in the bottom quintile pays no taxes, and, in fact, gets a refundable credit.

Calling those taxes non-progressive is to ignore things like the standard deduction and personal exemptions, and for Virginia an Earmed Income credit equal to 20% of the Federal EIC, or more.

Meaning that a single parent with one child and making minimum wage - $15,000 per year. Would first of all have a standard deduction of $3,000 and personal exemptions of $1860. So their taxable income would be $10,140. Giving them a tax of $377 - a mere 2.5% of their income. Less than half of what a sales tax of 5% would likely be.

But then, since their Federal EIC is $3,050, they would get an EIC from Virginia of $610. Leaving them a tax bill of negative $233. They get a check for that amount, making their tax rate (1.5%).

Alabama is perhaps one of the worst examples, among states that have an income tax,

But even there the income tax results in this

bottom quintile - 1.1%
4th quintile - 2.3%
middle quintile - 2.7%
2nd quintile - 2.9%
next 15% - 2.8%
top 4% - 2.6%
top 1% - 2.5%

Not very progressive, but the bottom quintiles still pays less than half of what the top pays in income tax rates and the next quintile also pays a lower rate than the top 1%.

Now look at the results of the sales tax

bottom quintile - 4%
4th quintile - 3.7%
middle quintile - 3.3%
2nd quintile - 2.7%
next 15% - 2.0%
top 4% - 1.2%
tiop 1% - .6%

In this case the bottom quintile pays 6.66 times as much as the top 1% for a tax rate and the middle class pays 5.5 times as much.

If Alabama's income tax is not progressive enough, it is certainly far, far more progressive than Alabama's sales taxes.