In the last 30 years, these trends have only gotten worse. Southern states have steadily increased the tax burden on their poorest citizens by shifting the support of the public sector to sales taxes and fees for public services. After California voters passed Proposition 13, which capped property-tax increases, in 1978, Western states began to move in a similar direction. Sales taxes on clothing and school supplies and fees for bus fare and car registration take up, of course, a far bigger slice of a poor household’s budget than they do from the rich.
Over the same 30-year period, some Northeastern and Midwestern states moved in the opposite direction. They mimicked the federal government by passing their own earned-income tax credits (and making them refundable, as the federal government has done, so that very low-income earners get a check after filing their returns), preserved progressive state income-tax rates, and either exempted food and other basics from sales taxes or gave sales-tax rebates to low-income households. No Southern state provides refunds to its poor citizens through the tax code, no matter how little they earn.
There are many reasons to worry about the growing regional divide. But even leaving aside basic fairness — why should a poor child in the Northeast have greater life chances than one in the South? — the divergence exacerbates poverty itself, driving households deeper into distress and lowering social mobility.