In Texas, we like to pride ourselves as being the standard-bearer of many things across the country. Unfortunately, our tax system leaves a lot to be desired. The latest update of Who Pays? by the Institute on Taxation and Economic Policy reveals that Texas has the third most unfair (or regressive) tax system in the entire country. This means that Texans who are least able to afford it pay more in taxes as a percentage of their income, than those who could easily afford to pay more.
ITEP’s report reveals that the poorest Texans pay four times as much in taxes, as a percentage of income, than the wealthiest 1 percent; middle-income Texans pay three times as much.
Many Texas politicians brag about Texas being a low-tax state. But Texas is not a low-tax state for low-income families because we ask them to pay an unusually high percentage of their income in taxes. As the chart below shows, Texas is tied for 5th place in having the highest taxes on the bottom 20 percent.
With the 84th Legislative Session now underway, state policymakers should be proposing ways to improve our tax system so it is fair and capable of supporting public services that we all use and benefit from everyday.