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I believe this could be done as the bill stated, by adding 3% which would put the sales tax between 9-10% dependent upon the county. It would not even be remotely close to 20%.
At 9-10% the sales tax would be in line with many states, of course higher than some, but still in a reasonable range.
If you want to pay 10% sales tax, be my guest, I refuse.
Then, people that live in broke states like to throw tax stones at others...
If you want to pay 10% sales tax, be my guest, I refuse.
Then, people that live in broke states like to throw tax stones at others...
This is a state tax issue so since you live in Texas it would not affect you. If I could pay 9-10% sales tax and no property tax then I would gladly do it.
Aren't many places in TX in the 8-8.25% sales tax range? I would think many homeowners might be glad to pay and extra .75-1.75% in sales tax and not have property tax.
This is a state tax issue so since you live in Texas it would not affect you. If I could pay 9-10% sales tax and no property tax then I would gladly do it.
Aren't many places in TX in the 8-8.25% sales tax range? I would think many homeowners might be glad to pay and extra .75-1.75% in sales tax and not have property tax.
Texans also have higher property taxes interestingly
Well large purchases do count. Most everyone buys furniture, appiances and electronics. If FL saels tax is at 10 percent compared to GA 4 percent I think you would immediately see shopping centers pop up on the border.
GA state sales tax is 4%, but like many counties here in FL, most have local "add-ons" to fund schools, roads, etc. No large population centers exist on the GA-FL border & those counties, for the most part, have a 7% sales tax.
Big ticket items (furniture, cars, etc) are purchased so infrequently that your scenario holds no water. Plus if businesses are exempted from property taxes, this could result in lower prices to the consumer.
None of us like paying taxes. I certainly don't. However, government services need to be funded somehow. The system we choose will create incentives & dis-incentives, be viewed as 'fair' to some, and 'unfair' to others.
State & local governments mainly get their funds from 3 sources: (1) income tax, (2) sales or excise tax, and (3) real estate (RE) taxes. No state that I am aware of is able to not have any of these 3.
TX has no income tax, but compensates for this with higher than average sales & property taxes. This encourages making a large income, but not buying an expensive house or spending all that you make.
HI has low RE taxes for residents, but a higher than average income tax, high RE taxes for non-residents, and a 4% excise tax (excise taxes apply to a far wider variety of transactions than does a sales tax). The high income tax results in many very wealthy people not becoming HI residents and simply paying the higher RE taxes on their condo or home. If your income is high enough, the RE tax bill will be less than the income tax increase of changing legal/tax residences.
For many reasons, I favor no (state or federal) income taxes, low RE taxes, and an excise/consumption tax, where the excise tax is the primary source of revenue.
To understand why, first consider the state of California (or Mexifornia for you Victor Davis Hanson fans). CA has very high income tax rates and exceptionally low RE taxes for long-time home owners. This created a very unstable revenue stream: the state got about 50% of its revenue from around just 140,000 residents. When the property bubble ended, the income & capital gains revenue dropped significantly and the state finances have yet to recover (of course, the state also spent like drunk sailors on leave...).
Essentially, income taxes are very inefficient; they discourage work and encourage both tax avoidance and evasion. Due to both (legal) avoidance and (illegal) evasion, the base the tax applies to gets reduced and the rate must rise to compensate. Thus, the evasion & avoidance of a few forces the rest to overpay. That is very unfair.
A sales or excise tax produces much more stable revenue streams since consumption varies less from one year to the next. Since an excise tax applies to a much wider base of transactions than a simple sales tax, it's rate can be kept (relatively) low. A low rate applied to a very broad base makes it hard for people to evade paying taxes and does not create a large incentive to look for (legal) ways to avoid the tax.
A major benefit of the excise tax, is that as a consumption tax, it brings in revenue from the 'underground' economy. Those who, say, make a small fortune growing and selling 'weed' maybe able to totally evade the income tax, but they won't be able to totally avoid or evade a consumption tax. On a national level, the tax revenue lost from unreported income is estimated at some $300 billion (or more).
Some often claim that a consumption tax 'unfairly' penalizes the poor. To some degree that can be true if there does not exist something like the earned income tax credit and/or lower rates for 'food & medicine'. On the other hand, we have on a national level that about 50% of the populace pays zero into the federal kitty if you exclude Soc Sec taxes (since these people will also get Soc Sec benefits at some point, it is 'fair' to exclude this tax from the discussion). Is it really 'fair' that half the populace pays zero?
So, the legislator who proposed the idea of moving FL to only a 'sales' tax may not be the sharpest knife in the drawer, but with a little thought, retooling the state of FL to a consumption based tax can be made into an excellent idea. I wish TX would move more in that direction. If FL makes the switch, I'll sell and move a few years earlier than currently planned ...
None of us like paying taxes. I certainly don't. However, government services need to be funded somehow. The system we choose will create incentives & dis-incentives, be viewed as 'fair' to some, and 'unfair' to others.
State & local governments mainly get their funds from 3 sources: (1) income tax, (2) sales or excise tax, and (3) real estate (RE) taxes. No state that I am aware of is able to not have any of these 3.
TX has no income tax, but compensates for this with higher than average sales & property taxes. This encourages making a large income, but not buying an expensive house or spending all that you make.
HI has low RE taxes for residents, but a higher than average income tax, high RE taxes for non-residents, and a 4% excise tax (excise taxes apply to a far wider variety of transactions than does a sales tax). The high income tax results in many very wealthy people not becoming HI residents and simply paying the higher RE taxes on their condo or home. If your income is high enough, the RE tax bill will be less than the income tax increase of changing legal/tax residences.
For many reasons, I favor no (state or federal) income taxes, low RE taxes, and an excise/consumption tax, where the excise tax is the primary source of revenue.
To understand why, first consider the state of California (or Mexifornia for you Victor Davis Hanson fans). CA has very high income tax rates and exceptionally low RE taxes for long-time home owners. This created a very unstable revenue stream: the state got about 50% of its revenue from around just 140,000 residents. When the property bubble ended, the income & capital gains revenue dropped significantly and the state finances have yet to recover (of course, the state also spent like drunk sailors on leave...).
Essentially, income taxes are very inefficient; they discourage work and encourage both tax avoidance and evasion. Due to both (legal) avoidance and (illegal) evasion, the base the tax applies to gets reduced and the rate must rise to compensate. Thus, the evasion & avoidance of a few forces the rest to overpay. That is very unfair.
A sales or excise tax produces much more stable revenue streams since consumption varies less from one year to the next. Since an excise tax applies to a much wider base of transactions than a simple sales tax, it's rate can be kept (relatively) low. A low rate applied to a very broad base makes it hard for people to evade paying taxes and does not create a large incentive to look for (legal) ways to avoid the tax.
A major benefit of the excise tax, is that as a consumption tax, it brings in revenue from the 'underground' economy. Those who, say, make a small fortune growing and selling 'weed' maybe able to totally evade the income tax, but they won't be able to totally avoid or evade a consumption tax. On a national level, the tax revenue lost from unreported income is estimated at some $300 billion (or more).
Some often claim that a consumption tax 'unfairly' penalizes the poor. To some degree that can be true if there does not exist something like the earned income tax credit and/or lower rates for 'food & medicine'. On the other hand, we have on a national level that about 50% of the populace pays zero into the federal kitty if you exclude Soc Sec taxes (since these people will also get Soc Sec benefits at some point, it is 'fair' to exclude this tax from the discussion). Is it really 'fair' that half the populace pays zero?
So, the legislator who proposed the idea of moving FL to only a 'sales' tax may not be the sharpest knife in the drawer, but with a little thought, retooling the state of FL to a consumption based tax can be made into an excellent idea. I wish TX would move more in that direction. If FL makes the switch, I'll sell and move a few years earlier than currently planned ...
This is a state tax issue so since you live in Texas it would not affect you. If I could pay 9-10% sales tax and no property tax then I would gladly do it.
Aren't many places in TX in the 8-8.25% sales tax range? I would think many homeowners might be glad to pay and extra .75-1.75% in sales tax and not have property tax.
That would work out great for homeowners, people that don't own property, however, would just be taxed more. That seems to work out to what many would call more entitlements for the rich that can afford to own property while the rest get a tax increase.
Quote:
Originally Posted by chopchop0
Texans also have higher property taxes interestingly
The property tax rates are high because Texas doesn't have a state income tax and thus our schools, social services, roads, and infrastructure are supported by the property tax, our school districts are independent, unlike Florida where all public schools are "County schools", ours are within an independent district and funding for those schools are usually via property taxes from within their district, voters in that district can raise or take away from their funding, It's one of the reasons you can have two similar houses blocks away from each other and one has a property tax of $4,000 per year and the other $2,500 per year.
Our MUD (Municipal Utility District) taxes are also high because of dwindling supply of water and the processes to clean it.
Ironically, Texas ranks 41st in tax burden, despite the high property taxes.
We also enjoy the 3rd lowest cost of living in the country (behind Oklahoma and Tennessee)
I read that a Florida State rep (Fred Costello) recently introduced a bill to eliminate all property taxes in Florida...instead, the bill calls for raising the sales tax. Can anyone tell me the status of this bill? We're looking to escape the insane, out-of-control property taxes of Long Island (currently at just over $18,000/yr for us...NY is pathetic). If Florida really does eliminate property taxes, we're out of here. Thanks for your information.
Now that is quite a concept..no taxes! I don't see how Mr. Costello can even think that a State can run without taxes. Unfortunately, there are services in each town that require the income from taxes to survive and I am not just talking Sales Tax to cover stuff. Do you realize how much Sales Tax would have to be charged in order to cover the Fire Dept, Police Dept., Ambulance Services, even a dang streetlight? How about water, sewer, road repairs, city parks?? How about schools?? Those are run mostly on tax money as well. I heard Long Island taxes were outrageous..they aren't that splendid here in CT either but we do get alot of "bang" for our buck when you think about it. If you want to move someplace where taxes are not so bad I wouldn't go to a state where one of their Reps claims he has introduced a bill to eliminate property tax. I just don't see how it can happen and how a state would survive?? Do some research and see where other states are at with their tax rates. I think you will find that most of us are kind of high..not as high as you are in Long Island, but high just the same.
The pint of contention for many is not the property tax itself, but how through the property tax, a person is always "renting" their property from the government; the tax is not dependent on the person's ability to pay; the tax is not proportional to the services consumed by the person; and the tax is based upon appraised value of the property, whereas the value of the property is not an objective factor in the services received, nor the ability of the person to pay.
Many people like property taxes as they are because; they are use to it; the poor like it as it burdens the wealthier, or at least people with higher value properties; the wealthy like it because it keeps people out who could feasibly save for a million dollar property, but could not afford the yearly property taxes to keep it.
The government likes property taxes as it gives them the ultimate control over your property, and they are the true owners, pay or get it seized. Property taxes also keep people in the labor force, as no matter how self sufficient you think you can be, you will still need to come up with money to pay the tax on "your" property.
Again, the tax is not based upon any ability for the person to pay; the choice is pay or be homeless. Medical, job loss, reduced income, etc; too darn bad.
That would work out great for homeowners, people that don't own property, however, would just be taxed more. That seems to work out to what many would call more entitlements for the rich that can afford to own property while the rest get a tax increase.
About 70% or more of the housing units in Florida are owner occupied so a vast majority of the population would see a benefit, besides the fact that when taxes have to be paid on rental units the cost is passed on to the renter, a decrease or elimination of property taxes would benefit more than just homeowners.
Those that would call it entitlements for the rich would be way off unless they think 70% of Florida is rich. There are also many that could afford a house, earn more than many others and choose to rent but still have full use of all the county, city, state, etc. roads, schools and more. Where is the equality there?
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