In Alabama, the less money a person earns, the greater the percentage that person will likely pay in taxes compared to others with bigger paychecks.
That's according to a new study prepared by the Washington, D.C. based Institute on Taxation and Economic Policy.
The study ranks Alabama's tax system as the 10th most regressive in the country.
The results of the study, which examined tax burdens on a range of incomes for non-elderly taxpaying families in all 50 states, were released at a news conference Thursday in Montgomery.
The poorest 20 percent of Alabama residents pay 10.6 percent of their wages to taxes, including income, sales and property taxes, according to the group's research.
Following the poorest 20 percent of Alabama's population, the middle 60 percent pay 9.6 percent of their wages to taxes.
The wealthiest one percent of Alabama's wage earners pay 4.9 percent in taxes.
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An Analysis of the Tax Systems in all 50 States
By an overwhelming margin, most states tax their middle- and low-income families far more heavily than the wealthy, according to a new study by the Institute on Taxation & Economic Policy.
Nationwide, middle-income families pay almost 10 percent of their earnings in state and local taxes and poor families pay more than 11 percent. But the richest people effectively pay only 5.2 percent of their income in state and local taxes.
Since 1989, state and local taxes have risen on low- and middle-income taxpayers, but have fallen on the very wealthiest.
Ten states — Washington, Florida, Tennessee, South Dakota, Texas, Illinois, Michigan, Pennsylvania, Nevada, and Alabama — are particularly regressive. These “Terrible Ten” states ask poor families — those in the bottom 20 percent of the income scale — to pay up to 5.5 times as great a share of their earnings in taxes as do the wealthy. Middle-income families in the “Terrible Ten” states pay up to 3.5 times as high a share of their income as the wealthiest families.
The least regressive states are Delaware, Montana, Vermont and California. These states have progressive personal income taxes and/or low reliance on sales and excise taxes.
Who Pays? | |||
| State | Poorest 20% | Middle 60% | Top 1% |
| Alabama | 10.6% | 9.5% | 4.9% |
| Alaska | 3.8 | 3.0 | 2.8 |
| Arizona | 12.5 | 9.7 | 6.6 |
| Arkansas | 11.2 | 10.8 | 7.8 |
| California | 11.3 | 9.4 | 10.6 |
| Colorado | 9.9 | 9.2 | 6.8 |
| Connecticut | 10.3 | 10.4 | 6.4 |
| Delaware | 4.7 | 5.4 | 6.9 |
| D.C. | 8.4 | 10.9 | 8.6 |
| Florida | 14.4 | 9.9 | 3.0 |
| Georgia | 10.9 | 9.9 | 7.4 |
| Hawaii | 12.6 | 11.2 | 8.0 |
| Idaho | 9.7 | 9.3 | 8.7 |
| Illinois | 13.1 | 10.4 | 5.8 |
| Indiana | 11.7 | 9.9 | 6.3 |
| Iowa | 10.6 | 10.4 | 7.9 |
| Kansas | 11.5 | 10.4 | 8.0 |
| Kentucky | 9.6 | 10.0 | 7.8 |
| Louisiana | 11.5 | 9.5 | 6.0 |
| Maine | 10.0 | 10.2 | 9.7 |
| Maryland | 9.4 | 9.5 | 7.6 |
| Massachusetts | 8.6 | 9.2 | 6.8 |
| Michigan | 13.3 | 11.1 | 6.7 |
| Minnesota | 10.5 | 10.4 | 9.3 |
| Mississippi | 9.9 | 9.7 | 6.9 |
| Missouri | 10.0 | 9.5 | 7.4 |
| Montana | 6.1 | 7.0 | 7.2 |
| Nebraska | 10.6 | 10.3 | 9.4 |
| Nevada | 8.3 | 6.3 | 2.0 |
| New Hampshire | 8.1 | 5.8 | 2.4 |
| New Jersey | 12.4 | 9.8 | 8.2 |
| New Mexico | 12.1 | 10.4 | 8.7 |
| New York | 12.8 | 12.0 | 9.1 |
| North Carolina | 10.5 | 10.0 | 8.8 |
| North Dakota | 10.2 | 9.1 | 6.5 |
| Ohio | 10.9 | 10.7 | 9.7 |
| Oklahoma | 12.0 | 11.2 | 7.9 |
| Oregon | 9.4 | 8.5 | 8.9 |
| Pennsylvania | 11.4 | 9.1 | 4.8 |
| Rhode Island | 13.0 | 10.7 | 8.6 |
| South Carolina | 7.9 | 9.0 | 2.3 |
| South Dakota | 10.0 | 9.0 | 2.3 |
| Tennessee | 11.7 | 8.8 | 3.3 |
| Texas | 11.4 | 8.3 | 3.5 |
| Utah | 11.5 | 11.0 | 7.6 |
| Vermont | 10.0 | 9.8 | 9.7 |
| Virginia | 9.1 | 8.4 | 7.0 |
| Washington | 17.6 | 11.1 | 3.3 |
| West Virginia | 9.3 | 9.7 | 8.7 |
| Wisconsin | 10.2 | 11.9 | 8.1 |
| Wyoming | 7.6 | 5.4 | 1.7 |
Source: http://www.ctj.org/itep/whopays.htm
