States responses to IRS tax caps

[Chuckanut]

I believe Sales Taxes are part of the L in SALT.

Besides, this regressive solution wouldn't be so easy peasy for those on a fixed income.

This problem needs a more creative solution than this.

Agreed. A multi-tax system is more balanced and fair than simply relying on one type of tax. The caveat is that often having multiple tax sources often means multiple sources of HIGH taxation.

 

[Senator]

I believe Sales Taxes are part of the L in SALT.

Besides, this regressive solution wouldn't be so easy peasy for those on a fixed income.

This problem needs a more creative solution than this.

I am guessing that most people paying more than $10K in property taxes pay less in sales taxes.

I am also guessing the people on a fixed income do not pay in taxes what the state spends on them...

It would pick up the cash economy, which I would say is pretty large.

 

[Winemaker]

When I was a salary slave, we paid a 1% local income tax on EARNED INCOME that was federally tax deductible, so I considered that Local. Now then, PA has a 6% sales tax in some counties and a few counties have a 7 or 8% sales tax, the extra 1 or 2% going to the stadiums that the voters said they shouldn't have to pay for.

 

[Senator]

When I was a salary slave, we paid a 1% local income tax on EARNED INCOME that was federally tax deductible, so I considered that Local. Now then, PA has a 6% sales tax in some counties and a few counties have a 7 or 8% sales tax, the extra 1 or 2% going to the stadiums that the voters said they shouldn't have to pay for.

The NFL... It's snake oil for the masses.

 

[Brat]

I live in a state with an income tax, no sales tax. When my parents were alive, and well before the computer era, I asked them why that is the case. My Father said that a sales tax is expensive to administer and audit, for that reason he felt that the economic burden of a sales tax was more than an income tax. His other issue was that a sales tax is regressive, the poor spent a higher % of their income on taxed goods (even when food and medicines were exempted) than the upper and middle income residents.

Oregon does benefit from the spending of our sales tax neighbors but when we moved to WA I was surprised to learn that the base price same item (construction materials, specifically) in WA was higher than in OR. I wonder if my Father's theory of the increased cost of sales tax collection may have been the reason.

Back to the original subject.. Until we have the opportunity to grind the numbers it may be that the lower % on taxable income will offset the SALT limitation.

 

[joeea]

I am guessing that most people paying more than $10K in property taxes pay less in sales taxes.

I am also guessing the people on a fixed income do not pay in taxes what the state spends on them...

I'm not sure what either of those have to do with anything.

The idea of reducing the progressive tax system and making up for it with a regressive tax system seems rather cruel to me. And unlikely to actually happen.

 

[gerntz]

I believe Sales Taxes are part of the L in SALT.

Besides, this regressive solution wouldn't be so easy peasy for those on a fixed income.

This problem needs a more creative solution than this.

Two things:

1. Sales tax gets income from those that are in the cash economy to avoid income taxes.

2. Said states could pay those on fixed income to offset the increased sales tax.

 

[gerntz]

Exactly, but I feel the same way towards a child care tax credit. I get tired of subsidizing other peoples kids.

If the kids actually eventually get a job, and pay plenty of SS, I may be OK with it. Unfortunately, I suspect that I will be subsidizing most of the kids for their entire life...

The difference is that creating kids is an asset to the country for the future and our government checks' payments.

 

[Pilot2013]

Those "wealthy" states have had all kinds of advantages over the other states, and need to pay more as it is their "fair share"....

 

[Senator]

The difference is that creating kids is an asset to the country for the future and our government checks' payments.

That is exactly what I am afraid of, our government checks' payments are going to the families with the most children. I do not see them becoming the highly paid workers.

I see a lot as a landlord. Very few people in apartments with kids pay their own rent. Most are on some sort of subsidy. I do not take subsidized renters, so they have to move on. I regularly see families with 4+ children.

These renters are not paying anything in income taxes, state or federal. Many do work on the side doing some service work for cash. Of course, I take cash for rent.

 

[rodi]

Thanks for the interesting discussion.