A ratings firm ranked Delaware in the top five in terms of the fairness of its tax system.
Montana ranked first in tax fairness, while Washington ranked No. 50.
The ranking comes as Delaware wrestles with a structural budget gap that is a by product of the current tax system.
A Business Roundtable report called for action on the problem and Gov. Jack Markell issued an executive order calling for a bipartisan panel to make recommendations. (See story, Page 2.)
The firm WalletHub analyzed and ranked all 50 states, using income taxes, sales and excise taxes, and property taxes.
In its ranking, Wallethub used the results of an online survey of 1,050 people “ to assess what Americans think a fair state and local tax system looks like.” Analysts then compared public perception to data on the real structure of tax systems in all 50 states. “We believe this is the first ever ranking of state and local tax fairness that matches representative data on what Americans consider ‘fair’ with real data on the structure of state and local tax systems,” a Wallet Hub release stated.
A common thread in tax fairness ratings seemed to be income taxes. Delaware has a relatively high personal income tax, while Washington and Florida (No. 45) ranked low on fairness. Neither state levies an income tax.
The survey reported that the poor are most overtaxed in Washington, Hawaii and Illinois. The wealthiest 1 percent are most undertaxed in Wyoming, Nevada and Florida.
One argument against increasing the top income tax rate centers on the ability of wealthier residents to move to Florida and avoid paying state income taxes.
