An economist looking at Vermont statistics can see that the state is benefiting from the U.S. economic expansion, which became
the longest on record last summer: There are more jobs, higher wages, fewer children in poverty.1
At the same time, many Vermonters can look at their paychecks and wonder when the recession is going to end. The state’s
economic growth continues to favor those who are well off, while low- and moderate-income families wait for things to pick up.
Both views are true.
Through decades of laws and policy decisions, Washington’s elected leaders have created a tax code that is the most upsidedown, or regressive, in the nation, meaning that those with low incomes pay a much higher share of their income in taxes compared to the wealthiest. In other words, Washington’s tax policies favor certain people based on their income and wealth, while continuing to hold low- and middle-income people back.
This brief addresses the question: How and to what extent does a person’s race and ethnicity determine how Washington’s upside-down tax code impacts them?
Tens of thousands of upper-income Ohioans are qualifying for tax credits that seemingly are limited to those who have much lower incomes. It’s all legal – and it’s probably costing the state millions of dollars a year.
Not only does Ohio’s state and local tax system fail to produce enough revenue to properly fund schools, child care, transit and more, it’s upside down. In 2018, low-income Ohioans pay almost twice the share of their income in such taxes as the state’s most affluent do. Ohio ranks 13th worst in the nation in terms of state and local tax unfairness.