Income Inequality Hurts the State Budget

According to an analysis by Standard & Poor’s, as the income gap has widened over the years, growth in state tax revenue has declined, from 11 percent annually from 1950 to 1979 — before the income gap began to noticeably widen — to 7 percent since 2009. Bottom line, according to the report, “increasing income inequality is undermining the rate of state revenue growth” in California and nationwide.