It Pays to Be Rich

There's not a single state in the country in which the rich pay a higher percentage of their income in state (though not federal) taxes than the poor. According to a state-by-state scorecard from the Corporation for Enterprise Development (CFED), only Washington, D.C. has an equal tax burden for its wealthiest and poorest citizens.

The CFED scorecard looks at income taxes, property taxes and consumption taxes to determine its percentages, and the results are clear. For instance, if you're in the poorest 20 percent of Washington state, you pay almost 7 times as much in state taxes as the top 1 percent. In fact, Washington taxes its poor at the highest rate in the country while its wealthiest residents have one of the lowest rates. It's the most extreme example of the difference in tax burdens between the rich and the poor, but it's hardly alone. In Wyoming, Nevada, South Dakota and Florida, the bottom quintile pays at least five times as much as the top 1 percent.

But the "Assets and Opportunity Scorecard" goes beyond simply looking at income to examine some of the many facets of poverty. While the number of people below the poverty line is at its highest in 20 years, that measure doesn't account for the many Americans living on the edge of financial collapse or the costs of long-term needs like homes or cars. 

In particular, asset poverty around the country—whether people have resources to cover expenses for three months if they lost their income—means layoffs and medical emergencies can easily plunge a family into poverty. The number of "asset poor" families has increased, according to the scorecard, by 21 percent; while last year, one in five families didn't have the assets, now it's one in four. Things are particularly bad for minority communities: 44 percent of households of color are asset poor.

The report judges states based not only on their statistics but also on what public policies they have in place to alleviate poverty—stuff like tax credits for working families, job-quality standards, and access to health insurance. The programs have a clear impact, says CFED:

[In] Nevada, which provides little support for programs that increase financial security, more than 45 percent of residents are asset poor – the highest rate in the nation. By contrast, Vermont, the state with the lowest asset poverty rate in the country (15.7 percent), has long supported programs that help residents improve their financial stability and future opportunities.

The scorecard is full of information, and you can spend days pouring over its different elements—that is if you don't get too depressed first.

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