A tax system that penalizes the working class: Washington State: the most regressive tax system in the USA

There is a lot of talk about state and local taxes being regressive in our state. In fact, among the 50 states, Washington state has the most regressive tax system of all.

Regressive means that if you are in the bottom fifth of households in our state, you contribute almost 17% of your income to state and local taxes, if you are in the middle, you contribute 10%, and if you are in the top 1%, you contribute 2.4%.

Source: http://www.itep.org/whopays/states/washington.php Who Pays? A 50-state report by the Institute on Taxation and Economic Policy

Of course, conservative pundits like to point out that the people at the top pay more in actual taxes.

This translates to the graph below: The income of the wealthy is more than 63 times the income of the poor, and more than 19 times the income of the middle class, but the wealthy pay in total in state and local taxes 9 times that which the poor pay, and 4.5 times that which the middle class pay. So any way you cut it, the wealthy are making out like legal bandits.

What is missing from the discussion is the economic fact that we all have a limited amount of time in a month, a year, or a lifetime. When you consider the time value of money (including taxes), we can get a real sense of the tax system in our state penalizes the poor and middle class, and freeing the wealthy to luxuriate in their wealth.

This graph illustrates how our current tax system favors the wealthy and penalizes the poor and working class citizens of our state and city:

So our tax system takes months away each year from the poor, while giving the wealthy a free ride from January 9 for the rest of the year!