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Hawaii has the second-highest taxes on the poor and the 15th most unfair state and local tax systems in the country, according to a recent report from a Washington, D.C.-based nonprofit.
The Institute on Taxation and Economic Policy issued its 2015 report "Who Pays: A Distributional Analysis of the Tax Systems" this week. The report measures taxes that will be paid in 2015 by different income groups as a share of their total income.
The 10 states with the highest taxes on the poor are Washington, Hawaii, Illinois, Florida, Rhode Island, Arizona, Texas, Indiana, Pennsylvania and Arkansas.
The 10 states with the most inequality in their tax systems, taking into account the taxes on all income levels, were Washington, Florida, Texas, South Dakota, Illinois, Pennsylvania, Tennessee, Arizona, Kansas and Indiana. Hawaii ranked 15th on this list.
"The tax inequality index measures the effects of each state’s tax system on income inequality," the report said. "Essentially, it answers the following question: Are incomes more or less equal after state taxes than before taxes?"
Its main finding is "on average, state and local tax systems require the poorest taxpayers to pay the highest effective tax rates."
The report measures taxes for those under age 65. Visit www.itep.org.
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