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Property taxes are on the high side here but with no state income tax I still save a boatload of money over neighboring states.
I'd say the overall tax burden matters more than whether your property or purchases are taxed. In reality, most people have to pay both property and sales tax, though the property tax in some southern states is quite low... these are not necessarily states I'd want to live in... whether that factors into anything or not.
The revenue has to come from somewhere... given the choice I'd rather people who consume more pay more, so I have no problem with sales tax. Some people just gotta have those designer jeans, expensive car, or go out to eat all the time... I also have no problem with the property tax system we have today that's based on assessed value. If you have a larger, bigger, newer house, you should pay higher property taxes.
South Dakota's tax burden is among the very lowest, and it requires a 2/3 legislative majority to pass any tax increase in this state. In the end you should live in an area that fits what you are looking for. Most of the surrounding states don't really provide the added services for their tax burdens, with the exception of Wisconsin.. I love how all the roads in that state are paved.
Any property or sales tax increase will have a negative impact on the growth of the economy here.
You're assuming that taxes are just disappearing from the economy, rather than being spent in some beneficial way that contributes to economic growth. You're basically assuming your conclusion.
That seems like a fairly inefficient way to redistribute wealth, but I don't know much about places where "the government has half a freakin brain".
How is this administered? Is it part of an annual income tax calculation? Is there some separate way to apply for it?
Everyone who files a tax return is automatically enrolled. They calculate the amount they send based on your taxable income.
That same low income person gets a "Child tax benefit monthly for each child. You get approx. $2000 per child per year. So a low income family with four kids gets a cheque in the mail for about $700 per month. That is enough to pay the rent in much of the country. That is a way better system than food stamps.
You're assuming that taxes are just disappearing from the economy, rather than being spent in some beneficial way that contributes to economic growth. You're basically assuming your conclusion.
Sales taxes are easier to skirt around. It is highly regressive because the richer can cut spending and instead of getting their toys because they will be taxed either with the purchase or down the road depending on the proposal you go by, they hoard. Let's remember, hoarding holds no long-term economic benefit for society at large. For an individual basis, it is fine but if everyone did it, it is a bad thing.
As a compromise, property taxes could be payable when the property is sold. Then unemployed people could stay home and not spend much and not pay much in taxes, till they sell their house. Property taxes could be increased to replace all other taxes. Mortgage companies would demand bigger down payments and shorter-term mortgages, to make sure the value of the property as collateral would not be ruined by accrued taxes. People would be able to afford houses in boom times, but not so much in bust times. Elimination of all other taxes than property taxes could cause a lot of boom times.
Advantages of doing it that way include gentrification; reduction of crime; higher demand for broadband, for telecommuting, which could cause more rapid development of broadband technology; lower welfare costs; higher demand for public transportation, which could lead to more investment in development of public transportation technology; improved attitudes about, and emotional investment in, neighborhoods, by their residents; being able to make all other taxes unconstitutional, to clarify the future, for increased economic stability; and a lot of other advantages. It would be a major change for everyone. We could hope it would be a good change overall. That hope, of that change, could give us Obama's "hope and change."
As a compromise, property taxes could be payable when the property is sold. Then unemployed people could stay home and not spend much and not pay much in taxes, till they sell their house. Property taxes could be increased to replace all other taxes. Mortgage companies would demand bigger down payments and shorter-term mortgages, to make sure the value of the property as collateral would not be ruined by accrued taxes. People would be able to afford houses in boom times, but not so much in bust times. Elimination of all other taxes than property taxes could cause a lot of boom times.
Advantages of doing it that way include gentrification; reduction of crime; higher demand for broadband, for telecommuting, which could cause more rapid development of broadband technology; lower welfare costs; higher demand for public transportation, which could lead to more investment in development of public transportation technology; improved attitudes about, and emotional investment in, neighborhoods, by their residents; being able to make all other taxes unconstitutional, to clarify the future, for increased economic stability; and a lot of other advantages. It would be a major change for everyone. We could hope it would be a good change overall. That hope, of that change, could give us Obama's "hope and change."
Americans don't save enough as is so if you defer tax revenue to the sale chances are many wouldn't have money to pay the taxes. It would also be horribly disruptive to the revenue stream many places need to operate
Property taxes tax wealth. Which is a better way to raise revenue than income tax, which taxes productivity. Those with the most valuable property have the most to gain by public works, good schools and police and fire protection. The problem is that the extremely wealthy have little or no actual taxable income.
There are flaws to all the methods of taxation, which is why a sensible mix of all three is likely the most ideal.
Close.
Property taxes tax controlled value. For instance, the bank owns the debt that covers the vast majority of the value of my house. However, the property tax is paid 100% by me, and 0% by the CDO that contains my mortgage. Therefore, the tax is not on wealth I have accumulated. If taxes were only on the wealth that people own, it would be vastly different from taxing based on the value of the assets they control.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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Quote:
Originally Posted by mkpunk
Sales taxes are easier to skirt around.
True, especially for those in states bordering non-sales tax states. On the way back from a road trip we packed the car with items purchased in Oregon and saved a couple of hundred on sales tax.
True, especially for those in states bordering non-sales tax states. On the way back from a road trip we packed the car with items purchased in Oregon and saved a couple of hundred on sales tax.
Even if WA sales tax is 10% (which I do not think it is), you would have to spend $2000 to save $200 in sales tax, and I do not even think groceries are taxed in WA.
Aggregate over a year, sure, the savings add up. But the tax-free state would have to be very convenient for a person to go to, enough to overcome the added expenses of getting to there. Large purchases would be a target, but how many people and how often make such large purchases of $2000? Enough to make it an issue?
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