A total of 44 of the 50 US states worsen income inequality by allowing the wealthy to pay a lower share of their income in taxes than lower income people. An increasing reliance on sales and excise taxes has helped fuel this inequality. Nationally, on average, the effective state tax rate on both incomes and from sales is 11.4 percent for the lowest-income residents; 10.5 percent for middle-income residents; and 7 percent for the richest residents. Research shows that in 36 states, the poorest residents are taxed at the highest rate of any income group. Various state-level policies, such as cutting taxes on the wealthy to supposedly drive economic activity, has worsened this situation. And inequality is far starker in the US than in other comparable countries. The Gini coefficient for the US has ballooned to 0.42, up from a modest 0.35 in 1970. In 1970 half of the wage-earning public earned 25% of all income. Now a half century later in 2024, half of the wage-earning public earns only 5% of all income. This at a time when CEOs of top 100 US firms earn on average $600 for every $1 by workers. “When you ask people what they think a fair tax code looks like, almost nobody says we should have the richest pay the least amount of taxes,” said Carl Davis, research director of the Institute on Taxation and Economic Policy. “And yet when we look around the country, the vast majority of states have tax systems that do just that. There’s an alarming gap here between what the public wants and what state lawmakers have delivered. State economies would actually get a boost if tax systems were adjusted to have the rich pay more.