How High Should Taxes Be?

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As the debate over tax progressivity continues, an article in Public Finance Review points out that, while the United States federal tax system is generally recognized as progressive,

“…a few states have complemented the progressive federal income tax with progressive tax systems of their own. On average, across all states, however, low-income households pay a larger share of their income in state and local taxes than do wealthy households. In other words, state and local tax systems tend to be regressive, although there is significant variation in the degree of regressivity.

PFR_72ppiRGB_150pixwThe article examines the relationship between voter ideology, ethnic demographics, and the distribution of tax burdens across income groups, stating that “a state’s ethnic demographic context has statistically and economically significant effects on the progressivity of the tax structures utilized by state and local governments.”

Click here to read the article, “Voter Ideology, Economic Factors, and State and Local Tax Progressivity,” published by John M. Foster of the University of Kentucky in Public Finance Review, and stay informed about the latest economic research from the journal.

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