According to a new study, low- and middle-income Michiganders are paying more in taxes than the rich.
The nonprofit policy organization Institute on Taxation and Economic Policy released the findings in a national study called “Who Pays?” The report analyzed tax systems in all 50 states and the District of Columbia.
The study found that Michigan is one of 41 states that tax the top 1% less than every other income group. According to the study, the average effective state and local tax rate is 7.1% for the lowest-income 20% of individuals and families, 9.7% for the middle 20%, and 5.7% for the top 1%. Michigan also reportedly has the 34th most regressive tax system in the nation.
The study’s authors declared that Michigan’s tax system exacerbates inequality.
“When you ask people what they think a fair tax code looks like, almost nobody says we should have the richest pay the least. And yet that’s what we see in Michigan and many other states,” said Carl Davis, ITEP’s research director. “There’s an alarming gap here between what the public wants and what state lawmakers have delivered.”
And it’s not just Michigan. Across the nation, on average, the study shows the lowest income bracket of taxpayers face a state and local tax rate that is nearly 60% higher than the top 1% of households.
Though wealthy residents are being taxed less than the rest of us in Michigan, the state is slightly below the national average. The nationwide average state and local tax rate for those with the lowest income is 11.3%, 10.5% for the middle 20%, and 7.2% for the top 1% of earners.
Basically, we 99% are getting screwed.
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