A Washington, D-C think-tank has labeled Iowa’s tax system “regressive” although it doesn’t rank as the list of 10 worst.Richard Sims, policy director for the Institute on Taxation and Economic Policy, says lower income taxpayers pay a greater proportion of their income in taxes than do the wealthiest Iowans at the top end of the income scale. An Iowa household with annual earnings under 14-thousand dollars pays over 10-and-a-half percent of their income in state and local taxes, while Iowans at the top end who earn more than 257-thousand annually pay just under eight percent of their income on state and local taxes. Sims says when you factor in the quirk in Iowa income-tax law that lets folks deduct their federal tax liability, middle income and lower income Iowans pay about double what the upper income do. Sims says the dramatic income tax cuts passed in Iowa back in 1998 exacerbated the problem.The Institute judges the tax burden in the state of Washington to be the worst.
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