Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Occidental Petroleum Corporation (OXY), EOG Resources Inc (EOG): These Six States Tax the Poor the Hardest

Tax fairness has become a hot-button issue, with a big debate over whether the rich and the poor pay their fair share of federal taxes. But at the state level, many states have tax structures that make poor people pay a far greater percentage of their incomes in taxes than those who are better off.

Back in January, the Institute on Taxation & Economic Policy released an analysis (opens  a PDF) of the tax systems in all 50 states, with the goal of figuring out how different groups of taxpayers fared under each state’s tax laws. What it found was that when you divide people into groups by income, the poorest 20% paid more than 11% of their income in taxes on average, compared with just half that rate for the wealthiest 1%.

But in many states, the poor paid even higher taxes. Let’s look at the six states that the Institute on Taxation & Economic Policy identified as taxing the poor the hardest.

6. Texas
Texas imposes taxes on the poor equal to 12.6% of their income, compared with just 3.2% in tax on its wealthiest taxpayers. Like many of the states on this list, Texas doesn’t have an income tax, relying instead on more regressive sales taxes of 6.25% statewide, with an average of 1.89% added on for local taxes. Oil revenue does play a major role in funding state government, with Occidental Petroleum Corporation (NYSE:OXY) and EOG Resources Inc (NYSE:EOG) far outpacing their peers in total oil production during 2012. But that doesn’t keep the state from ranking in the top 30% of states for sales-tax collections, hitting the poor especially hard.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading...