Living in South Carolina you get use to the state ranking at the bottom of good things and at the top of bad things. Recently, our state was ranked number one in the rate of women murdered by men.
So when South Carolina is ranked at the top of a good list, we should recognize that feat.
WalletHub just released a ranking of states “based on the fairness of their state and local tax systems—including income taxes, sales and excise taxes, and property taxes.”
South Carolina was ranked THIRD!
Now this wasn’t about the lowest taxes. It was about taxation fairness. Over a thousand Americans were asked what a fair tax system looks like in regards to income levels and taxes paid. Then this picture of tax fairness was compared to actual data from the states.
So what do Americans think is a fair amount of taxes for different income levels ($5,000 to $2.5 million annually) to pay?
Answers ranged from a low of 2.5 percent tax for households earning $5,000 annually to a high of 16.36 percent tax for households making $2.5 million per year. There is a clear upward trend: respondents think state and local tax systems are fair when higher-income households pay a greater percentage of their income in taxes than lower-income households.
This belief in a progressive tax system holds up regardless of the respondent’s income or political ideology.
So how do the actual state and local tax structures stack up to the progressive tax system supported by most Americans?
Not well at all. While South Carolina did better in emulating this tax fairness ideal than almost all other states, the reality is this:
The data show that the real relationship between household income and state and local tax burden is negative — that is, as income goes up, state and local tax burden goes down — the exact opposite of what Americans think is fair.
Americans believe in fairness even when it comes to taxation. Unfortunately, other political forces come into play at the local, state and federal levels to subvert the goodness of the people.