Federal Reserve: These states are stealing from the poor

Keep clicking to see which states are playing anti-Robin Hood with their residents.



Source: Federal Reserve (PDF), Washington Post

less Income inequality has been a growing problem, but who's to blame? A team of researchers at the Federal Reserve are placing the blame on a number of states who are actively "undermining" federal tax codes meant to uplift America's poor. Income inequality has been a growing problem, but who's to blame? A team of researchers at the Federal Reserve are placing the blame on a number of states who are actively "undermining" federal tax codes meant ... more Photo: Megan True, Staff Photo: Megan True, Staff Image 1 of / 25 Caption Close Federal Reserve: These states are stealing from the poor 1 / 25 Back to Gallery

A team of researchers at the Federal Reserve are pointing fingers at more than a handful of states they say are actively undermining the government's attempts to curb income inequality.

According to a new paper, the federal tax code works to compress income inequality across the U.S., a problem that has been growing since 1980. The general idea is that high earners should be taxed at higher rates, allowing a good portion of that revenue to go into programs that help lower-income people.

In contrast, some states have instituted "regressive" tax policies that offset federal taxes and widen the growing gap between the haves and have-nots.

"The overall progressive structure of federal taxes tends to mitigate income inequality across households to a substantial extent in all U.S. states," the paper reads. "However, we find that state-levied taxes, on average, work to exacerbate income inequality."

One of the chief offenders mentioned in the paper are gas taxes. The writers say gasoline taxes reverse about a tenth of the compression achieved by the federal tax code.

"Nationwide, state tax systems widen the income distribution by 0.9 percentage

point with gas taxes included, but compress the income distribution by 0.6 percentage

point when gas taxes are excluded."

Washington Post writer Christopher Ingraham says those offending states are "in essence" robbing the poor to give to the rich.

See which states are said to be playing anti-Robin Hood in the gallery above.