Why So-Called 'Low Tax' States Dominated by Republicans Aren’t Always So Low in Taxes
Two things one can count on in life are death and taxes, and in the United States, Republicans like to portray themselves as the party that allows Americans to keep more of their hard-earned money. But in states dominated by Republicans, a lot of taxes are still being paid—although they’re more likely to be hidden or less obvious.
Texas is a state where the Republican Party has a strong ground game politically, and because Texas has no state income tax, Republicans consider it heaven for taxpayers. But Texas collects taxes in other ways. Texas has a statewide sales tax rate of 6.25%, and sales taxes at the county or city level can exist as well. Texas allows a total sales tax rate of up to 8.25% when state, city and/or county taxes are combined, and that 8.25% is what one finds in Houston, Dallas or San Antonio.
Other taxes in Texas include 8.25% on alcoholic beverages, a gasoline tax of 20 cents per gallon, property taxes (on average, Texans are paying around $2654 annually if they own their homes) and taxes on cable or satellite television. For Internet access, anything over $25 on a bill is taxed.
Taxes around the world can be either regressive or progressive. With progressive taxes, the poor have the lowest tax rates because they’re the least able to pay—while the rich are taxed at higher rates. Regressive taxes, however, will tax people at the same rates across the board regardless of their ability to pay. And sales taxes, because they are often flat taxes, can be quite regressive.
On April 2, USA Today published an article that gave a state-by-state rundown of sales tax rates in the U.S.—and some of the higher sales tax rates were in red states.
For example, USA Today reported combined sales tax rates (factoring in state and average local taxes) of 9.1% in Alabama, 9.5% in Tennessee, 8.9% in Oklahoma, 8.7% in Kansas, 9.5% in Tennessee, 9.4% in Washington, and 9.4% in Arkansas compared to 6.6% in New Jersey, 6.4% in Connecticut, 6.3% in Massachusetts, 6.0% in Maryland and 4.3% in Hawaii. The highest sales taxes in the country can be found in Republican-dominated Louisiana, with a combined state/local rate of 10.0%—while Oregon, Delaware and New Hampshire (all states that both Barack Obama and Hillary Clinton carried in presidential races) don’t even have a state sales tax.
None of that is to say that living in a blue state automatically means having low sales tax rates. New York State and California both have combined sales tax rates of 8.5% in USA Today’s rundown. But it does explode the myth that people in red states live tax-free—it’s just a matter of how they’re taxed. Lower income taxes don’t automatically mean that one is escaping sales, utility, gasoline or property taxes.
Another myth promoted by Republicans is that the poor don’t pay taxes. Even though the poor have less income to tax, they’re likely to be taxed in other ways—from sales taxes to taxes on utilities to taxes on their phone bill. And there’s no wiggle room with sales taxes. When minimum wage workers in red states need to purchase something essential at a dollar store—for example, soap or toilet paper—those state and local sales tax rates are not open for discussion. They have to pay them regardless of how little they’re making. And the poor in red states know all about death and taxes because they suffer from lower life expectancy than the affluent.
The taxman has a wide variety of ways to obtain revenue around the U.S. And in red states, he is alive and well despite Republican claims to the contrary.