Don't understand Idaho's high taxes (live, assessment, agriculture)

[Sandpointian]

freedom is not free!

But seriously, taxes are far too high here for what one gets for those taxes. What we get for "free" from life here, from a great relationship with nature to some of the friendliest people I have ever know, seems to dominate the reality of our taxes.

Income taxes: Far, far too high. Marginal rates overwhelmed by how low the brackets are set.
Taxes on Food: as regressive as one can get.
Petrol taxes: low, thank goodness
Property Taxes: A bit too high. Would like to see them come down 50 bp to 1% for homeowners who have owned the house for 10+ years, primary or rentals.

We still love it here, but were SP or NID move toward the urbanization we see elsewhere, then the grumbling wll and should increase to effect change.

S.

[cdelite]

Originally Posted by gbioryl

So after doing some research and math I discovered what my real income tax rate would be. I will be making $38400.00. Now the top bracket stops at $21,436.00 for married couples. The max tax on that is $1,093.18, which is 5.1% of $21,436.00. The difference that would be taxed at 7.4% is $16,964.00, which would be $1,255.33 in additional income tax for a grand total of $2,328.53 paid as income tax at a 6.0% total income tax rate. Yes I think I did that right.

$1,093.18 is 5.1% of $21,436.00.

$1,225.33 is 7.4% of $16,964.00.

$1,093.18 plus $1,225.33 equals $2,328.53.

$21,436.00 plus $16,964.00 equals $38,400.00.

$2,328.53 divided by $38,400.00 is 6.0%.

Still high for a conservative state, but at rate I can live with. Between that rate, a sales tax of 6.0% and a property tax of .61% for a total of 12.61% of my income in taxes. The higher overall tax in Washington is 11.04% and that is without an income tax. It is a difference that I can live with for the freedoms Idaho will give me.

Hi gbioryl. I am pondering a move to ID and have been looking at the income tax issue as well. I think you are way over-estimating the amount of tax you would have to pay, because you didn't take into account deductions and exemptions.

Since you're married, the state gives you a $12,400 standard deduction. Plus you'll get a $4000 exemption for yourself, another for your wife, and another for each kid you have. Let's assume no kids:

$38,400 - 12,400 std deduction = $26,000 - 2(4000) exemptions = $18,000 "taxable" income.

According to the Idaho tax tables for Form 40, the tax on $18,000 for married filing jointly is $851, which is 4.73% of your taxable income, and only 2.2% of your real ($38,400) income.

That looks extremely attractive from where I'm sitting (Texas). I pay more than 10 times that in property taxes down here, for the privilege of living in a good school district. That's why we're looking to get out.

[f5fstop]

Originally Posted by Sandpointian

freedom is not free!

But seriously, taxes are far too high here for what one gets for those taxes. What we get for "free" from life here, from a great relationship with nature to some of the friendliest people I have ever know, seems to dominate the reality of our taxes.

Income taxes: Far, far too high. Marginal rates overwhelmed by how low the brackets are set.
Taxes on Food: as regressive as one can get.
Petrol taxes: low, thank goodness
Property Taxes: A bit too high. Would like to see them come down 50 bp to 1% for homeowners who have owned the house for 10+ years, primary or rentals.

We still love it here, but were SP or NID move toward the urbanization we see elsewhere, then the grumbling wll and should increase to effect change.

S.

For property taxes, they already cut it in half for property owners who are living in that house. As for rentals....keep it at 100%. Too many rentals are not kept up by the owners.

What might be nice is an amendment that limits raises in property taxes to a cost of living bracket. But when the house is sold, the property taxes will go up to where they would be without the limit. They have this in MI and works pretty good.

[1AngryTaxPayer]

Originally Posted by banjomike

Whether it's worth it or not all depends. Lots of folks in California who owned homes they bought for $50,000 and sold for $250,000 downsized into apartments and used the money to buy rentals here. In Idaho Falls, rental apartments were always scarcer than homes until the mid-90s, when a lot of Cali money was poured into new apartments.

Obviously, the it must have been profitable to invest the money here; I don't know anything about the profit margins, but there sure were a lot of investors. Some moved here as well.

I'm like you, f5.
I would rather pay income tax and find ways to minimize it than getting gnawed on by all the sales and property taxes.

For me, knowing one big tax hit is coming is a much better incentive to save than the hidden taxes are. I would rather stash my future tax money in an account and take the interest myself than have the interest go in some other pocket.

While the interest rates are pretty lousy now, I found that just letting my interest lie in the account is building a cushion if I ever have a big jump in income tax. Back when they were higher, the interest was a little ace in the hole for whatever. I seldom touch a savings account for any money except for the purpose of the account.

It may be worse than you think. I had a lot of my neighbors move out during the boom at the right time. One lady bought for 16g and sold for 650g. I wish I had done the same but it's already heading back up to where it was so save me a spot

[gbioryl]

Originally Posted by cdelite

Hi gbioryl. I am pondering a move to ID and have been looking at the income tax issue as well. I think you are way over-estimating the amount of tax you would have to pay, because you didn't take into account deductions and exemptions.

Since you're married, the state gives you a $12,400 standard deduction. Plus you'll get a $4000 exemption for yourself, another for your wife, and another for each kid you have. Let's assume no kids:

$38,400 - 12,400 std deduction = $26,000 - 2(4000) exemptions = $18,000 "taxable" income.

According to the Idaho tax tables for Form 40, the tax on $18,000 for married filing jointly is $851, which is 4.73% of your taxable income, and only 2.2% of your real ($38,400) income.

That looks extremely attractive from where I'm sitting (Texas). I pay more than 10 times that in property taxes down here, for the privilege of living in a good school district. That's why we're looking to get out.

Interesting.

[Cnynrat]

I saw in the news that there is a proposal in the state legislature to implement a flat 6.6% income tax rate, and to increase the sales tax rate to 7% while exempting groceries from the sales tax.

Dave

[banjomike]

Originally Posted by Cnynrat

I saw in the news that there is a proposal in the state legislature to implement a flat 6.6% income tax rate, and to increase the sales tax rate to 7% while exempting groceries from the sales tax.

Dave

I expect the sales tax to go up, but the flat tax proposal may fail. Groceries won't be taxed any longer under the sales tax proposal, so that will make the increase easier to swallow.

The flat tax, however, will nick the poorer taxpayers deeper than the rich taxpayers, so I expect some of the present exemptions will be lowered as a way of making up the difference.

The financial mess that the Gwartny education deal that was just thrown out is going to cost every us all millions of bucks before it's finally fixed. Some tax or there had to go up, because the tax deck of cards has already been shuffled six ways from Sunday, and the state will need more revenue to get it done.

I expect Idaho will sign on to the other half of Obamacare as well. We are all footing the MedicAid costs for the indigent already, and the millions of dollars in federal assistance available right now is going to cut those costs in half.

In the end, if Idaho signs on, our tax burden will most likely remain the same as it is now, or with only a slight increase in our state tax bill.

[f5fstop]

Problem with sales tax is as it goes up, internet sales will also go up, unless laws are passed to prevent it. And I thought the sales tax increase was more linked to the possible fuel tax increase. One would go up the other wouldn't. And last I read (a few days ago) it looked like the fuel tax would go up about 8 cents per gallon. Of course the Feds will also increase it so we can all expect to pay more, and even though it is cheap now, it sure won't be for long.

And I personally don't have a problem with increase in fuel taxes SO LONG AS IT GOES TOWARD THE ROADS AND BRIDGES. If they want bike lanes or mass transit those are other matters and get the money somewhere else. But we all know that will never happen. Give a bunch of politicians more money and they will spend it on some pork barrel project they like.

As for Obamacare, I'm guessing that any state with any common sense will wait to see how SCOTUS rules at the end of June on the subsidies to the states. If they rule against Obamacare, there will have to be some major changes to the law. So a wait and see position is best before spending any money on changes to state healthcare systems. And there was NO guarantee that any state that received subsidies would continue to receive those subsidies as the plan aged. That is one reason why some states refused to set up exchanges. (But as Nancy said, "We have to pass the bill so that you can find out what is in it, away from the fog of controversy? And she was correct, as we can all tell from the news.)

And let's not forget the local school mileage increases. I know Pocatello/Chubbuck wants an increase and one reason is to cover some drugs that have raised in price for the teachers health insurance. Don't ask me what I think of that idea. But I never saw any statement to the fact that maybe they should have the teachers foot the bill for those limited use drugs.

Personally, I'm sick and tired of every time the politicians need more money all they see are the taxpayers pocket. It is about time they sat back and looked at what can be cut first, them after that fails, start looking for more money. I'm also tired of supporting other people who don't have my last name. Too many people on the public check book who do not deserve it!

As for the flat tax, you are right, Mike. It hurts the low income more than the rich.

[banjomike]

I agree, f5. A gas tax increase that goes straight to roads and bridges is the best and most fair tax raise of all, and the gas tax hasn't been raised for at least 20 years.

All the bike lanes and the other stuff should be local option only. There are cities that need them and cities that don't, and they should decide that issue for themselves. Towns like Shoshone or Inkom will never need bike lanes.

I also agree it's good to wait until the court challenges to Obamacare are settled before any state decision happens. While I doubt Obamacare will ever be completely struck down, as there are so many folks on it now, it could well be radically revised. Patience is always good.

[VandalsLOL]

http://media.spokesman.com/documents...is-2-20-15.pdf

Idaho is really funny. Our politicians are so ideologically blind they don't even consider how their policies work in effect.