MAY 25, 2011: At the core of the budget crisis facing states are regressive state tax structures that are unfair, unsound, and unsustainable by design. A report released today by United for a Fair Economy provides a sensible solution: inverting the state’s current tax structure.
KEY FINDINGS:
- Every state has a regressive tax structure that would benefit significantly from a direct inversion into a progressive structure.
- An inverted tax structure for every state would raise a combined $490 billion in new revenue, immediately eliminating state budget deficits.
- A cuts-only approach to state budget deficits is shortsighted—imposing immediate harm on families, while dampening economic recovery and compromising the future competitiveness of the American workforce.
- A progressive tax structure provides commonsense equity, economic efficiency, and adequate revenue to invest in communities and spur economic growth.
- To achieve an inverted, progressive structure, states must establish or improve upon the graduated personal income tax while reducing reliance at the state and local level on regressive sales, property, and excise taxes.