New research from Federal Reserve experts shows that, for the most part, state taxes undo some of the efforts the federal tax code makes to reduce income inequality. That’s to be expected: states rely more heavily on sales tax and gasoline taxes, which take a greater proportion of income and utility away from low-income folks than from high-income folks.
Wonkblog converts the data into a fun hover-activated map. The Wall Street Journal provides a handy chart showing the five states who tax policies actually do the most good in fighting income inequality and the five states whose tax policies undermine that good fight the most. As is all too usual, Minnesota beats South Dakota:
Minnesota is the best state in the nation for fighting income inequality. South Dakota is the worst in the region and fifth worst in the nation.
Look, we don’t have to Harrison Bergeron everyone and make sure every citizen gets the same fixed income. We can let some people settle for teacher pay while others choose doctoring and lawyering to get rich. The state doesn’t have to give everyone a touchdown, but it should at least work for a level playing field. Let’s stop roughing the poor and giving the rich a pass. Let’s work toward a more progressive South Dakota tax system.