States looking for revenue to fund key priorities like education, infrastructure, and pensions need look no further than tax fairness. Tax fairness—the principle that the wealthy should be taxed the same as the middle and working classes—could help resolve a number of state funding challenges.
A report released earlier this year by the Keystone Research Center and Good Jobs First found that states could generate large amounts of additional revenue to meet public needs by fixing inequities in state tax codes. The study also shows that surging inequality has skewed huge amounts of income to the one percent, who pay far lower tax rates than the middle class, squeezing state budgets unnecessarily.
Taxing the top fifth of taxpayers at the same rate as the middle class could generate as much as $128 billion in additional revenue each year. In many states, this is more than enough to fund their annual pension contributions. In Texas, Florida, and four other states, the annual cost of paying off pension debt is less than 10 percent of revenue generated from tax fairness on the top one percent. Instead of cutting taxes for corporations and the wealthy and then gutting pensions for working people and their families, politicians need to be fixing inequitable tax codes and guaranteeing a safe and secure retirement for all.
The next time you hear someone say that the pensions of hard working cops, firefighters, teachers and nurses (who, by the way, pay a portion of each and every paycheck into their pension!) costs too much money, remind them of the huge tax giveaways that politicians give to the wealthy and well-connected.