Sunday, October 28, 2018

MassBudget: Low-income taxpayers pay higher share in "upside down" Massachusetts system, new study shows



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Oct. 25, 2018







Low-income taxpayers pay higher share in "upside down" Massachusetts system, new study shows
Taxes pay for the essential services and programs that everyone uses, from fire protection and health inspectors to roads and schools. But in Massachusetts, those with the lowest income pay the largest share of their incomes in state and local taxes.
The Massachusetts Budget and Policy Center (MassBudget) finds in its new paper, Who Pays? Low and Middle Earners in Massachusetts Pay Larger Share of their Incomes in Taxes, that in the Commonwealth's "upside down" tax system those with the lowest incomes pay 10 percent of their earnings in state and local taxes, while those with the highest incomes pay 6.8 percent. 
MassBudget: Low-income taxpayers pay higher share in "upside down" Massachusetts system, new study shows
This "upside down" tax system also has lopsided effects when it comes to race. Because historic and systemic barriers have blocked Black and Latinx people from access to quality education, high-paying jobs, and other opportunities, these taxpayers are more likely to be low-income and therefore tend to pay a larger portion of their earnings in state and local taxes.
Finally, the report finds that other states with overall fairer tax systems tend to tax their top earners at significantly higher income tax rates than their other taxpayers. States that succeed in collecting a greater share of income from the top 1 percent of earners are using a top tax rate, similar to the proposed "millionaire's tax". These states include California, New Jersey, Minnesota, Vermont, and the District of Columbia. While Massachusetts was set to vote this year on a higher income tax rate on income over $1 million, a ruling from state's Supreme Judicial Court struck it from the ballot.
The Massachusetts Budget and Policy Center (MassBudget) produces policy research, analysis, and data-driven recommendations focused on improving the lives of low- and middle-income children and adults, strengthening our state's economy, and enhancing the quality of life in Massachusetts.

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Massachusetts Budget and Policy Center, 15 Court Square, Suite 700, Boston, MA 02108

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