A profound new study has been released, suggesting an alternate to budget cuts in order to stimulate economic growth. Claiming that every state has a regressive tax structure, United for a Fair Economy asserts that states would benefit significantly from an inversion into a progressive structure. This could raise a combined $490 billion in new revenue.
To invert a state’s tax structure, the state must flip their distribution of taxes. The wealthiest 20 percent will pay the share imposed on the least wealthy percent, and the least wealthy will pay the share that the wealthiest currently pay. According to UFE, this would eliminate every state’s budget deficit.
The current, cuts-only approach to state budgets is ineffective at best, and disastrous at worst. Instead of addressing the issue of a flawed budget, these quick-fix approaches actually cause widespread harm. Schools are being closed, thousands are losing their jobs, and hard working families are being forced to leave their homes. This, plus the addition of tax breaks for millionaires and billionaires, is widening the gap between the rich and the poor, while essentially eliminating what remains of the middle class. UFE‘s new, progressive tax structure, however, is far more efficient. It will act as a catalyst for economic growth and help restore our country to the level of economic vibrancy it once had.
In order to implement these changes, states need to improve upon the graduated personal income tax. Reduced reliance on regressive sales, property, and excise taxes is needed before a progressive tax structure can be implemented.
To read the entire text of the study, click here.