7.40% state income tax? Really? (middle-class, insurance, bankrupt)

[Cnynrat]

For the record, a married couple filing jointly would pay about $4,329 in tax on a taxable income of $70k, and about $13,331 in tax on taxable income of $200k.

I realize the original comment most likely referred to gross income, not taxable income, but there are too many variables in getting from gross income to taxable income.

If you are a relatively high income earner you may find your effective income tax rate (tax paid/gross income) in ID is just about the same as it was in CA. While it's far from the worst state around, Idaho is not a low tax state.

Dave

[Searching-01]

Originally Posted by banjomike

About $2100 on a $30,000 car.

Montana uses the Blue Book for it's license plates, so the plates for a 2019 car will cost about $3,000 the first year, $2800 on year 2, $2650 on year 3, etc. Whatever the depreciation is the Kelly Blue Book dictates.

So some states hit you with big tax at once, while Idaho takes out in little nibbles all the time.

Wow, really? $3,000 for plates?

[banjomike]

Originally Posted by Searching-01

Wow, really? $3,000 for plates?

I was only giving generalized figures- nothing intended to be accurate. But the plates for a new car in Montana will cost about as much as the sales tax placed on the same car that's sold in Idaho.

My 2018 car cost about $33,000, and the sales tax was about $2,100. The tax on a $45,000 pickup truck would be around $3,150.

You had better have the cash in the bank in Montana when you go buy the plates. In Idaho, the sales tax can be included in the car loan to whatever amount you wish, so the bite is less painful.

That need for having the money for the plates does decrease every year, following the depreciation in the Blue Book, so the plates for a 3-year old car will be cheaper, and much cheaper for a 10-year old car.

I think it tends to slow new car sales in Montana. For sure, you will see a lot of 20-year old beaters there on the road, partially because the yearly costs of the plates bottom out at around $40 a year eventually.

Idaho takes in nibbles frequently, while Montana takes it in big bites a few times a year. Both states tax differently, but the amounts that are paid are pretty similar, I think, although I've never done any comparison.

I'm sure many other states take similar approaches in their taxation to either Idaho or Montana.

[volosong]

Originally Posted by banjomike

Both states tax differently, but the amounts that are paid are pretty similar...

Montana taxes Social Security income while Idaho does not. That was one of the deciding factors for me in my decision to retire to either Wyoming, Montana, or Idaho.

[dcisive]

Yup it was indeed one of several things that iced the deal for me heading to Idaho. I think it's reprehensible to take a persons Social Security in any way shape or form. I shocked the so called independence oriented state of Montana has the cajones to do such a horrid thing.

[Cavalry_Chief]

Idaho taxes military retirement pensions. It's a shame that in 2014, HB420 failed by four votes.

[banjomike]

Originally Posted by jdhpa

I see the Idaho income tax rate has actually been going down:

2018: 6.925%
2017: 7.400%
2011: 7.800%

https://tax.idaho.gov/i-1110.cfm


Is something driving this? Is it going to continue?

I don't think so. The tax rates were cut during the Great Recession, and as they all do, the recession hit Idaho later than most of the nation, then lingered on longer here while the rest of the nation began recovering.

Idaho has always been cautious in spending revenues, even in the fattest of times. When the recession hit here, things became very lean for too long, and things like teacher's pay stayed so low for so long we began to lose our best teachers to neighboring states.

The same is happening right now with health care. Idaho only signed up to half of the ACA, which left a big hole in coverage that hit the citizens who needed health insurance the most uninsured.

A referendum was passed last year by an overwhelming margin to get Idaho signed up completely into the ACA to fill that hole at last, but it left the legislature in a quandary as how to fund the coverage.

And Idaho's Republicans fought the ACA tooth and nail, so that made the referendum doubly hard to swallow for them. But it's the will of the people, so somehow, they have to come up with the extra funding needed to establish the full ACA program.

I expect those two problems, and others, will force the legislature into a series of modest tax increases, a little at a time over several years until the legislature learns just how much more tax money is needed. Once that happens, the taxes will flatten out for a while and actually may come down a little just before a future increase.

Here in Idaho, where there's so much agriculture, it's always about last year's money. When the crop prices are high and everyone is doing pretty good, the state does good collecting taxes too, so there's no need for a raise.

But if last year wasn't good, then there's always some room in the collection that allows the state to coast for a year or two before any tax raises. The increases are always pretty small going up, and the tax decreases are just as small going down.

We are a conservative state, but we have to pay our way- Idaho by law can't have a spending deficit, so like it or not, the legislature has to pass an increase once in a while.

But Idaho also likes to have a substantial rainy-day fund. The tax increases usually come when that fund is becoming depleted, and sometimes, that fund takes a while to deplete.

[dcisive]

look at the bright side. We're WAY ahead of California and Illinois, 2 of the most corrupted and bankrupted states. So we're not all that bad

[volosong]

According to a report published by Wallethub about a month ago, Idaho had the eighth lowest overall tax burden in the Union. When considering the cost-of-living, Idaho ranks fourth lowest, just behind Delaware, Montana, and Alaska,

https://wallethub.com/edu/best-worst...taxpayer/2416/

[DKM]

Originally Posted by Cnynrat

For the record, a married couple filing jointly would pay about $4,329 in tax on a taxable income of $70k, and about $13,331 in tax on taxable income of $200k.

I realize the original comment most likely referred to gross income, not taxable income, but there are too many variables in getting from gross income to taxable income.

If you are a relatively high income earner you may find your effective income tax rate (tax paid/gross income) in ID is just about the same as it was in CA. While it's far from the worst state around, Idaho is not a low tax state.

Dave

That's higher than a family would be taxed in CA at those income levels. You have to make well over 200k in CA jointly before you pay taxes approaching Idaho or Oregon levels.