Research Report Federal-State Income Tax Progressivity
Frank Sammartino, Norton Francis
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This report finds that both federal and state income taxes are generally progressive but (1) state systems are much less progressive than the federal system and (2) the degree of progressivity varies widely among the states. Federal income taxes became more progressive following 2012 legislation that increased high-income tax rates. The higher federal tax rates also increased the subsidy provided by the federal deduction for state income taxes. Despite this incentive for states to raise their own income tax rates, more states lowered tax rates than raised them. Nonetheless, there was little change in the overall progressivity of state income taxes.
Research and Evidence Tax and Income Supports
Expertise Taxes and the Economy
Tags State and local tax issues State and local finance