The state-by-state analysis, released Nov. 15 by the Center on Budget and Policy Priorities — a Washington D.C. "thinktank" — ranks Louisiana as the nation’s sixth worst state for the income gap between its richest and poorest residents. Arizona, California, Georgia, New Mexico and New York are the only states with bigger gaps.

According to the report, the poorest 20 percent of Louisianans make an average annual salary of less than $17,000, while on the other incomedisparityside of the economic spectrum are the five percent of Louisiana’s richest residents, who according to CBPP, make an average of $238,600 a year. That translates into Louisiana’s richest making 8.8 times more than the state’s poorest.

David Gray and Steve Spires of the nonprofit Louisiana Budget Project say CBPP’s findings show:

 

[I]ncome inequality ... has grown faster in Louisiana than in most other states since the late 1990s. While incomes in the richest 20 percent of households climbed 17 percent from the late 1990s to the mid 2000s, middle-income households saw gains                                                                          of just 7.8 percent over that periodo, and incomes of the poorest fifth did not change.

One of the primary reasons for the problem, according to LBP:

[B]ecause Louisiana has one of the most regressive tax systems in the country, with sky-high sales taxes that disproportionately hit the poor, low property taxes and lucrative income-tax exemptions that are claimed mostly by the wealthy.

LBP argues that a possible solution to the problem lies in the hands of Louisiana’s lawmakers. According to LBP:

A good first step would be an increase of the value of the state Earned Income Tax Credit. Louisiana’s credit is currently the smallest in the nation at 3.5 percent of the federal credit, while the average state credit is 16 percent of the federal one. Additionally, policymakers could use tax reform as an opportunity to make Louisiana’s overall tax code less regressive and fairer by closing tax loopholes that primarily benefit the wealthy and reducing taxes that burden those with less.

Read the full state-by-state analysis from the Center on Budget and Policy Priorities here, and click here for all of the Louisiana Budget Project's commentary on the issue.

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