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Who pays Essay Example

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It appears the regressive taxes are a pronounceable feature in many states in the US.The most regressive states includes Washington, Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Arizona, Kansas, and Indiana. Florida, Texas, Illinois, and Kansas over rely on property tax. Property tax is regressive in nature. Florida, Texas, Illinois, Arizona, Indiana, and Kansas enjoy homestead exemption (14). A portion of the most regressive states offers circuit breakers as credit to ease the strain of offsetting the property tax bills. Notably, Arizona, Washington, South Dakota, Kansas, and Pennsylvania offer property tax credits to the elderly populations. However, the ten regressive states do not have low-income circuit break to help low-income renters, as well as, homemakers of varied ages. Washington tops the list of the states with the highest taxes on the poor population. According to the Institute on Taxation and Economic Policy report, Washington levies tax amounting to 16.8 percent of the total income (15). On the other hand, Arkansas charges 11.9 percent of the total income that the poor citizens earn. The retirement and pension income are exempted from taxation in Illinois. The state incurs the cost of such exemption. Statistics indicates that the cost of exemption in Illinois amounts to over $1 billion yearly (16).The most progressive states encompass Montana, Oregon, Vermont, California, Delaware, and the District of Columbia. The common attribute that the progressive states share is fairness in the tax systems. The state and local government tax systems are fairer in the progressive states as compared to the regressive ones. Similarly, the highest ranked states have progressive income taxes and tend to supplement the federal earned-income tax credit program for the moderate and low-income earners with refundable credits to assist in offsetting the property, as well as, the sales taxes. The measures tend to reduce the overall tax bill for the taxpayers who meet the set requirements. The vibrant progressive income tax structures embraced by the states counteract the deleterious effect that inequality poses on the growth rates of the tax revenue. In addition, the progressive states rely less on the excise and sales taxes. For instance, Delaware depends on progressive income tax as opposed to the consumption and personal taxes (5). California, District of Columbia, Minnesota, Oregon, Montana, and Vermont

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