New study: regressive state taxes in the U.S.
"The harsh reality is that most states require their poor and middle-income taxpayers to pay the most taxes as a share of income; middle- and low-income non-elderly families pay much higher shares of their income in state and local taxes than do the very well-off."
And it adds:
"Ten states-Washington, Florida, Tennessee, South Dakota, Texas, Illinois, Michigan, Pennsylvania, Nevada, and Alabama-are particularly regressive. These "Terrible Ten" states ask poor families-those in the bottom 20% of the income scale-to pay almost six times as much of their earnings in taxes as do the wealthy. Middle income families in these states pay up to three-and-a-half times as high a share of their income as the wealthiest families. 'Virtually every state has a regressive tax system," noted Gardner. "But these ten states stand out for the extraordinary degree to which they have shifted the cost of funding public investments to their very poorest residents.'"
The study does not mention tax competition but there can be no doubt at all that it is at play, wreaking terrible effects.