2.6 billion to 4 billion from September 2020 to September 2024, a 54% increase in four years.
Based on the increase in sales collection from the State Controller, the percentage increase in collection is below.
Sales taxes are tied to the price of an item, so if an item costs $100 in 2020 but increases to $200 in 2024, the sales tax would go from $6.25 to $12.50.
Sales taxes are set up to affect the middle and lower class the most.
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BERDEEN, Wash. — As she opened her $1,600 property tax bill in February, Edith Baltazar suddenly lost her appetite for the eggs she’d prepared for lunch with her daughter. Her thoughts raced: Would their home be taken away if she couldn’t pay it?
Baltazar’s daughter wept. The family would have to make a difficult decision: the property tax or $2,000 for diabetes medication.
The taxes won.
“Sometimes you have to choose — pay your property taxes instead of paying your water bill and everything else,” said Baltazar, recalling the stressful experience in a July interview.
The lowest-earning residents in Washington state, where Baltazar lives, pay almost 18% of their annual incomes in state and local taxes, while the wealthiest chip in 3%.
All but a handful of states make poor residents contribute a greater share of their income to taxes than wealthy people do. Economists call that upside-down approach “regressive.” Nationwide, the share the lowest-income earners pay to state and local taxes is 54% higher than what the top earners pay, according to the Institute on Taxation and Economic Policy.
And those policies hit communities of color the hardest.
Undocumented immigrants contribute billions of dollars in state and local taxes, according to estimates by ITEP and other groups, but aren’t eligible for many tax-funded services or tax rebates. Studies show assessors tend to inflate property tax assessments of low-priced properties, disproportionately owned by Black and Latino people. The higher tax bills increase the odds of what Baltazar feared — losing your home.
All this means state and local tax systems that could help address America’s widening economic inequality are instead making the problem worse.
The federal system also increases inequality, with legal loopholes giving very high-net-worth people massive tax breaks. But the Internal Revenue Service doesn’t force low-income residents to shoulder the biggest relative burden. Most states do.
