Suburb Tax (metro, suburban, downtown, population)

[HandsUpThumbsDown]

Originally Posted by Ohiogirl81

Not really. Everywhere I've lived in has had a municipal income tax. It is based on where you work; the tax comes out of your paycheck and goes to the municipality in which you work.

If you live in a different municipality, some will "forgive" or credit a certain amount of the tax you already pay. For instance, I pay 3.4 percent (or something like that; I've given up keeping track) to Philadelphia. My home city has a 1.9 percent income tax; that tax is forgiven because I already pay in Philadelphia. I pay no income tax to my home city, just property taxes.

Everyone who works in Philadelphia pays this tax; city residents pay a little more than non-residents but city residents' property taxes are lower.

When I lived in Cincinnati, which has a 2.1 percent income tax, and worked in another town that had a 1.0 percent income tax, Cincinnati forgave me the 1 percent paid to Batavia, and I had to pay 1.1 percent to the city. After I got a job in the city, the 2.1 percent just came out of my check

The upside of the city income tax is that property taxes are usually lower. That's the case in both Cincinnati and Philadelphia.

However, Ohio townships cannot levy an income tax; those residents usually pay higher property taxes. If you live in a township and work in a taxing city or village, you are SOL.

Some places have regional income taxes; it depends on the jurisdiction. Maybe this is more common in the East and Midwest than it is out West.

Interesting. So when I file my state taxes, since I live in Baltimore City and work in Baltimore County, I should be paying Baltimore County municpal tax? I don't remember doing this in the past.

[JR_C]

Originally Posted by HandsUpThumbsDown

Interesting. So when I file my state taxes, since I live in Baltimore City and work in Baltimore County, I should be paying Baltimore County municpal tax? I don't remember doing this in the past.

The rules vary from location to location.

In Ohio, I have 3 returns: federal, state, and city. Because I live and work in the same city, it's no big deal to me. But, people who live in the suburbs and work in the city, have to pay the city's income tax. Also, people who live in the city, and work in the suburbs have to pay the city's income tax. And, as Ohiogirl said, if the suburb also collects an income tax, the two can be combined in different ways. (worst case scenario, you owe both municipalities. best case, you only pay the higher of the two municipality's income tax, and that is shared between the two)

[Ohiogirl81]

Originally Posted by HandsUpThumbsDown

So when I file my state taxes, since I live in Baltimore City and work in Baltimore County, I should be paying Baltimore County municpal tax? I don't remember doing this in the past.

That depends solely on how Baltimore city and county -- not the state -- tax their respective residents. What is deducted from your paycheck?

Originally Posted by JR_C

In Ohio, I have 3 returns: federal, state, and city. Because I live and work in the same city, it's no big deal to me.

I never had to file a Cincinnati tax return once I became employed in the city; it's only residents who work outside the city that do, although when I lived and worked in Lebanon I had to file all three as well.

[JR_C]

Originally Posted by Ohiogirl81

I never had to file a Cincinnati tax return once I became employed in the city; it's only residents who work outside the city that do, although when I lived and worked in Lebanon I had to file all three as well.

A few years ago, Youngstown joined RITA, The Regional Income Tax Agency so now everyone has to file. (although, I'm told I should have filed a return even before the city joined RITA... oops!)

[North Beach Person]

Originally Posted by HandsUpThumbsDown

Interesting. So when I file my state taxes, since I live in Baltimore City and work in Baltimore County, I should be paying Baltimore County municpal tax? I don't remember doing this in the past.

Not in MD. On your state return your residence is noted (you used to have to enter a number code). Your employer deducts your state income tax from your pay and remits it to the state which then transfers x amount, as dictated by the piggyback tax rate, back to your county of residence. Baltimore City gets the whole amount of the piggyback while other municipalities have to divvy up the piggyback amount with the County where the municipality is located. I don't remember the percentage for municipalities but it's not much as an individual number but, of course, can be fairly substantial in the aggregate.

[Ohiogirl81]

Originally Posted by JR_C

A few years ago, Youngstown joined RITA, The Regional Income Tax Agency so now everyone has to file. (although, I'm told I should have filed a return even before the city joined RITA... oops!)

Yipe! But that's what smaller cities around here do as well. We pay all our income and property taxes to a third party, who (I would hope) divvies them up accordingly and credits us taxpayers correctly.

Seems like a real racket to me, although I'd guess there are some cost savings to the taxing districts.

Cincinnati mails out income tax returns to all its residents, but notes on the return that if you lived and worked within the city limits for the entire year, and your employer deducts from your pay, you don't have to file. One less thing to worry about, and thousands fewer papers for the bureaucrats to shuffle.

[wburg]

Sounds like a useful thing--we could certainly use a local payroll tax where I live, considering the monstrous number of commuters who work here and live in other cities or counties!

[pvande55]

In Chicago there is a head tax employers pay for the privilege of having an employee in the city. It is only $4.00, but the new mayor has promised to eliminate it. Since most suburbs don't levy one, it may have been at least a minor factor in business deciding to move to the suburbs.

[KC6ZLV]

Originally Posted by wburg

Sounds like a useful thing--we could certainly use a local payroll tax where I live, considering the monstrous number of commuters who work here and live in other cities or counties!

People in the county and other cities are already paying taxes for transportation. The taxes collected are distributed among the various cities and the county. Everyone living in the county pays them regardless of where they live.

[wburg]

Originally Posted by KC6ZLV

People in the county and other cities are already paying taxes for transportation. The taxes collected are distributed among the various cities and the county. Everyone living in the county pays them regardless of where they live.

And if they add up to less than the costs of maintaining and expanding the system, they aren't paying enough. And if the cumulative effects of so many commuters (including the loss of their property tax to other municipalities) is greater than the amount of money they bring to the city through other means, they aren't paying enough.

In general, we aren't paying enough to cover our expenses.
Ten Charts that Prove the United States Is a Low-Tax Country