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I used to hate property taxes, but in my state they are quite low and I receive a breakdown each year of where every penny of it went, as is the law. Most of it went to funding the same college and scholarship programs which combined allowed me to receive a free college education, thus I have no issues with that at all. I realize that in many states, property taxes are not at all low. However, I believe the states (well, counties) should be allowed to do as they please in that regard, since the residents have a more direct approach to changing them if they disagree through voting.
There are states without income taxes that seem to do just fine. In fact, the federal government used to survive just fine without any federal income tax. I recall something to the effect of the American Revolution being funded through lottery proceeds. Indeed, some states have drawn huge incomes from similar programs in this day and age. I still believe that the income tax system is mostly unfair, likely caused by too few tax brackets that cover way too large of income ranges.
In reality, the most "fair" taxes will always be excise/usage taxes. Drive often? We all have to pay gasoline/fuel tax when we fill up. But, that money should ONLY be used for road construction/maintenance. Perhaps more states should follow Colorado's example as to legalizing and taxing pot. Keep it up and eliminate the income tax wherever possible.
I must say that I hate property taxes, since it means I am effectively renting my "own" house from the local government. As a person living in upstate NY, I know the feeling all too well. I pay about $3,600 a year for a house I bought for about $80,000.
However, the house prices would probably be higher here if property taxes were lower. House prices reflect what the monthly mortgage+escrow payment will bear. Higher prices mean higher interest payments to the bank.
Either way, "the man" gets his money.
But at least the tax man uses the money for local needs like schools, police, firefighters, etc. The bank man, on the other hand, uses the money to buy a second yacht for his trophy wife.
Have no problems with generational wealth per se, but the gathering up of such into a small group has proven time and time again not to be a good thing for society overall. No, the USA isn't GB but there is a reason why many European nations and elsewhere moved to limit or break up concentrations of wealth.
All that the effort to break up concentrations of wealth did was drive that money to friendlier countries.
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Originally Posted by Scooby Snacks
Except they can't. Assuming you're in Texas you know what I'm talking about. We have a flat sales tax rate of approximately 8.25%. Therefore it doesn't matter how much a person spends, the amount of sales tax they pay is the same. It's not a progressive tax; it's a regressive tax.
It isn't pro-gressive, it isn't re-gressive.
It is the same for everyone. That is called being equal under the law. Something we used to believe in in the U.S.
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Originally Posted by Scooby Snacks
As for the estate tax, Texans also have to pay through the nose. Our property taxes are very high, among the highest in the country. My wife and I don't have kids, but we're saddled with $5K in taxes/year on a home valued at $150K. I get that someone has to pay for the schools, renters don't pay a penny, but the fact that the quality of the schools is ranked at 48th in the country and we're still paying so much money is a major cause of our dismay. However, we don't have a state income tax, so we save money on that front.
You are of course wrong.
Renters pay the property tax on the property they live it, it is just incorporated into the cost of their rent.
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Originally Posted by jwkilgore
Estate tax: No, it is not. The concept that it primary hits family farms and small businesses is a myth. With straight exemptions over $5million and gobs of loopholes and exceptions (extra exceptions specifically apply to family farms), maybe 0.2% of estates are even affected and most of those find loopholes and such. Repealing the estate tax would do nothing but give huge tax breaks to the heirs of multi-billionaires. Call is the Walton Heir Tax Relief Bill or Paris Hilton Shoe Fund Bill. And no, most of that money hasn't "already been taxed". Most of it is in the form of untaxed capital gains buried in stock portfolios.
No one that I saw said anything about where the estate tax primarily falls they merely listed examples of it.
What people said is it is immoral, and it certainly is. They are re-taxing money that has already been taxed. You cannot use the data from the IRS on who died and what the taxes were (like the Tax Policy Center, a liberal think tank does), because people already made decisions and moves to reduce the taxes where they can. That is not a good use of people's time and money. It only creates a lot of work for estate attorneys and trust companies. All that time and effort would be better spent on productive means of using the money.
The Economic Case Against The Death Tax
You don't even defend the morality of the death tax, you merely try to minimize its impact by saying it hits so few. Apparently it is okay to immoral as long as it only effects X number of people a year.
It is completely immoral that the O'Malley family was forced to sell the LA Dodgers rather than face the consequences when the senior O'Malley passed away. It was bad for the family, bad for the team and bad for the City of LA.
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Originally Posted by jwkilgore
Sales tax: In what world do you live in where normal people can "control how much they pay by choosing how much they spend"? The top 2% can do that, but anyone middle class or below just can't.
In a world where a middle class guy buys a Chevy for $25k and pays $2k in taxes and and upper class guy buys a BMW i8 for $140k and pays $11.2k. Each pays 8%. That is fair.
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Originally Posted by jwkilgore
A straight sales tax is the ultimate regressive tax in that the poor pay a higher percentage of their income.
Who gives a flying fig what percent of someone's income the sales taxes they pay is? A person who spends $10k in a year would pay $800 dollars in taxes. The person spending $100k in a year would pay $8,000 dollars in taxes. The person paying $8k in taxes is paying for more of the government than the guy paying $800.
The notion that people should pay different taxation rates comes from the idea that some are more equal than others.
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Originally Posted by jwkilgore
In what world is this a fair tax system?
A sane world.
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Originally Posted by ncole1
Property taxes to fund schools is ridiculous and needs to change, because it causes intergenerational inequality (those whose parents can't afford expensive housing receive subpar education, perpetuating the cycle). It's a horrible system.
I don't know where you live, but in California all property tax for education goes into one big basket and every school gets the same exact dollars per pupil as every other one.
Lots of good articles and papers from Heritage on the Death Tax.
It's not really a question of : Income vs. Sales vs. Property Taxes.
Pursuant to American law, no government instituted to secure rights can tax rights.
Only government privileges are subject to taxation.
The question should be : what revenue taxable privilege is involved that would impose an excise tax on one's income, retail transactions or property ownership?
I have no issue with using property taxes to fund municipal services like police, fire, and paving roads. I have a big problem using it to fund public education. The leafy suburbs with the expensive homes and relatively low number of children relative to the tax base fund excellent schools. The decaying cities and working class towns, not so much. We end up with socioeconomic self-segregation where the children in the gold-plated suburbs have a huge advantage over everyone else. I benefited from that system as a child but it is inherently unfair.
I think a flat state income tax is the right way to go. Everyone has a stake since everyone pays the same tax rate. It halts government bloat because everyone feels the same pain with a tax increase. It's really easy to hike taxes in a progressive income tax environment. Only the rich people pay it.
Sales taxes are very regressive. The less you make, the more you pay proportional to your income.
I agree that we need to move away from the model of local property taxes funding schools (except for local bond issues, etc. to finance "luxury" capital improvements - not the basic necessities). To make the schools more equitable put all the revenue into one pot and distribute it to the districts based on student population.
Which would in theory eliminate high performing and low performing schools and make them all a disappointing mediocre. Equality is just as much about dragging people down as it is bringing people up.
Oregon lobbyists try and try and try to implement a sales tax here - all with the same failed fate. We have state income tax here, and very high property taxes (high enough to have snuffed people out of their homes). Washington state has sales taxes but no state income tax.
I will NEVER vote in favor of a sales tax unless the sales income taxes is dropped altogether for it.
I live in Oregon also, they have tried and tried to pass a state sales tax with the caveat that they would phase out the state income tax, yeah, right, we would wind up like California paying both.
As far as property tax goes, this is done by the counties, each county sets their own tax rate and this tax is used to fund county operations.
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