SUBMITTED NEWS RELEASE
BOSTON–A new study has found that inverting state tax structures—whereby the highest income earners would be taxed at the current percentage of income for the lowest income earners, and vice versa—would collectively raise $490 billion in new revenue, immediately eliminating states budget deficits and avoiding the serious consequences of budget cuts.
In Nevada, inverting the tax structure–making the wealthiest in the state pay a percentage of their income similar to the percentage that working families now pay–would generate an additional $9 billion in state and local revenue, according to the report.
The report, titled “Flip It to Fix It: An Immediate, Fair Solution to State Budget Shortfalls,” was released this week by Boston-based United for a Fair Economy and the Progressive Leadership Alliance of Nevada, among other state-level organizations.
“Flip It to Fix It” attributes a large part of states’ current deficits to the regressive tax structures that the report shows are designed to fail. “Trying to raise adequate revenue through a regressive tax structure—where a greater percent of income is demanded of the poor than the well-off—is like trying to squeeze water from a stone,” said Karen Kraut, coordinator of state tax policy at United for a Fair Economy and co-author of the report.
According to the Institute for Taxation and Economic Policy, the wealthiest 1 percent of Nevada families pay 1.6 percent of their income in state and local taxes. The bottom 20 percent of wage-earning families, however, pay almost 9 percent to state and local taxes, which disproportionately rely on regressive sales and property taxes in Nevada.
“The inadequacy of regressive tax structures puts everything we value at risk: the well-being of families, the future competitiveness of the American workforce and the nation’s ability to rebound from the recession and prosper,” Kraut said.
The report contends that an inverted tax structure not only solves budget crises but also increases equity and best spurs steady and strong economic activity.
“Our reliance on unfair and unstable taxes has crippled Nevada’s ability to fund essential services, including public safety and education,” PLAN State Director Bob Fulkerson said Wednesday. “This state treats the wealthy very, very well, but working families are expected to carry the bill. That’s upside down.”
Fulkerson noted that many of the regressive aspects of Nevada’s tax structure were highlighted last month in PLAN’s “Bridging the Gap: Building a Sound Tax System in the Silver State,” a report detailing ways to make the state’s tax system more stable and more effective.
The national and Nevada reports calls for proposed progressive tax reforms, many of which are immediately achievable and would help fully fund Nevada’s needs.
The full report and state-by-state information are now available at http://www.faireconomy.org/flipitreport.
The Progressive Leadership Alliance of Nevada (PLAN) is a partner of United for a Fair Economy through its program, the Tax Fairness Organizing Collaborative, a network of statewide organizations in 24 states working to reduce economic inequality through progressive tax reform. PLAN works for economic, social and environmental justice in the Silver State. United for a Fair Economy is a national, independent, nonpartisan, 501(c)(3) non-profit organization located in Boston which works to rein in economic inequality and promote a more broadly shared prosperity.
