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Old Today, 09:16 AM
 
3,980 posts, read 1,108,866 times
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Quote:
Originally Posted by Chas863 View Post
People who earn less money pay less in taxes and tend to get a higher percentage of their taxes back in the form of government benefits because they EARN LESS, not because of where they live or how they vote.
Don't discount how they vote.
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Old Today, 10:06 AM
 
490 posts, read 208,545 times
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Quote:
Originally Posted by RationalExpectations View Post
Don't discount how they vote.
Yes, "how" they vote and what and whom they vote for *IS* very important. Perhaps I should have said "regardless what party they are registered to vote in" because a federal benefit such as Social Security or Veteran's Benefits doesn't care in which party you are registered to vote... or even if you're registered to vote at all. Federal benefits are awarded based on a person meeting certain criteria, not on the basis of which party you're registered to vote in.

So the argument that blue states get a lower percentage of their federal income tax dollars returned to them than red states is a specious argument. What really matters is the type of people who are elected to office and the type of policies they support.

If people are unhappy with the policies that their elected representatives support, then it's the fault of the voters who put them in office and it has nothing to do with the fact that other states may have smarter voters who elect better officials to represent them.

As I said above, if you're unhappy with the way things are being run in your state, then vote with your feet, i.e. move. And don't give the excuse that you can't leave your high paying job or your spouse can't find a good job in another state. Those are simply decisions that everyone has to make regarding where they live. If you choose the high income state, then you're choosing the high taxes and high cost of living that goes with it. That's the choice that YOU'VE made, so don't complain because other people made a different choice.
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Old Today, 10:16 AM
 
6,657 posts, read 2,429,582 times
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Quote:
Originally Posted by mizzourah2006 View Post
I mean I know the common answer is going to be “because that’s the way it’s always been” but I never understood why it made sense that you should owe less to the federal govt. in taxes because you chose to live in a state that had high income and/or property taxes.
Because it's not right to tax a tax.

Total income $90,000
Local property tax -$5,000
Untaxed income $85,000

Why should I pay federal taxes on a local tax? It's like double taxation. The feds should tax the $85k, not the $90k.
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Old Today, 10:20 AM
 
7,877 posts, read 4,235,485 times
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Quote:
Originally Posted by jnojr View Post
Exactly. If the voters in a given state want higher taxes, they should get higher taxes.

If the federal tax burden is good and necessary, then everyone should be paying their fair share, regardless of what else they pay anywhere else. And if the federal tax burden is too high or unfair, then it should be cut.
The irony of course is that the politics in these same states lean heavily towards wealth distribution and progressive tax rates as a philosophy. So as people in CA and NY are generally higher earners, they pay more in federal taxes. Fair in my book.

Personally even though I benefited from a higher SALT deduction I’d rather see it capped to expose the corruption present in many state and local governments. A lower tax rate with fewer deductions is very fair. Ideally it would be a fair/flat tax with zero deductions.

Where the squeeze in NY is coming is due to Cuomo passing a 2% property tax cap so now governments are limited with funding options. I had years on Long Island where my property taxes went up 6%, 7%, 8%.
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Old Today, 10:22 AM
 
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Quote:
Originally Posted by Elliott_CA View Post
Because it's not right to tax a tax.

Total income $90,000
Local property tax -$5,000
Untaxed income $85,000

Why should I pay federal taxes on a local tax? It's like double taxation. The feds should tax the $85k, not the $90k.
If you’re a renter you don’t get the deduction at all.
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Old Today, 10:48 AM
 
3,108 posts, read 1,202,853 times
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Quote:
Originally Posted by markjames68 View Post

Personally even though I benefited from a higher SALT deduction I’d rather see it capped to expose the corruption present in many state and local governments. A lower tax rate with fewer deductions is very fair. Ideally it would be a fair/flat tax with zero deductions.

Where the squeeze in NY is coming is due to Cuomo passing a 2% property tax cap so now governments are limited with funding options. I had years on Long Island where my property taxes went up 6%, 7%, 8%.
I agree. NJ made unsustainable promises to its public employees and the fat pension plan is in financial trouble. Every little podunk town and borough has its own school system with the attendant bureaucracy. Just before I left they'd found that my school district's Business Manager had embezzled over $1 million over a period of a few years. They found out only when the FBI showed up and confiscated the district's computers; their accounting firm had never found any issues in the audits although the crap he pulled was obvious (receipts for large amounts with no itemization, diverting funds to a company he set up). And did I mention that the liability limits the audit firm carried were the minimum required by the state and a tiny % of the amount stolen?

One change I'd like to see is alternative school budgets presented to the voters. Right now it's take it or leave it. I think they should be required to present two possible budgets, one with their "wants" and embellishments, and another that meets basic needs. The deluxe version will pass only if they can justify it to the voters.
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Old Today, 10:48 AM
 
490 posts, read 208,545 times
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Quote:
Originally Posted by Elliott_CA View Post
Because it's not right to tax a tax.

Total income $90,000
Local property tax -$5,000
Untaxed income $85,000

Why should I pay federal taxes on a local tax? It's like double taxation. The feds should tax the $85k, not the $90k.
The way I see it is that ALL income taxes (federal, state, and social security) are based on your total income (with certain deductions and limitations). So you could call it TRIPLE taxation if you want. And if you pay local income taxes, you could call it QUADRUPLE taxation. Call it whatever you like, but income taxes are based on your total income (with certain deduction and limitations).

There is no law of any kind (written or implied) that says if one government entity is taxing you on certain income, then another government entity can't tax you on that same income. Where would you ever get the idea that income can't be taxed by more than one government entity?

I think that what is confusing you is the fact that the federal government used to allow an unlimited amount of deduction for property taxes on your personal residence, but now they have put a cap on how much state and local taxes you can deduct for federal tax purposes.

You may not like the tax law change, but it is clear that it was done for equity purposes. Perhaps you don't like the fact that your neighbor who has 6 kids gets a bigger deduction in his federal taxes than you do. Perhaps you don't like that another neighbor gets a deduction for child care or college tuition or supporting his elderly grandmother or whatever, but these laws are made by the people who are elected to office.

As has been stated on other posts in this thread, if you don't like the high tax rates in your state, you DO have choices.
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Old Today, 10:49 AM
 
6,657 posts, read 2,429,582 times
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Quote:
Originally Posted by markjames68 View Post
If you’re a renter you don’t get the deduction at all.
True, but you never have to mow the lawn, fix the leaking toilet, paint the walls, or any other "honey do's"
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Old Today, 10:58 AM
 
27,028 posts, read 53,939,442 times
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Quote:
Originally Posted by Chas863 View Post
Yes, "how" they vote and what and whom they vote for *IS* very important. Perhaps I should have said "regardless what party they are registered to vote in" because a federal benefit such as Social Security or Veteran's Benefits doesn't care in which party you are registered to vote... or even if you're registered to vote at all. Federal benefits are awarded based on a person meeting certain criteria, not on the basis of which party you're registered to vote in.

So the argument that blue states get a lower percentage of their federal income tax dollars returned to them than red states is a specious argument. What really matters is the type of people who are elected to office and the type of policies they support.

If people are unhappy with the policies that their elected representatives support, then it's the fault of the voters who put them in office and it has nothing to do with the fact that other states may have smarter voters who elect better officials to represent them.

As I said above, if you're unhappy with the way things are being run in your state, then vote with your feet, i.e. move. And don't give the excuse that you can't leave your high paying job or your spouse can't find a good job in another state. Those are simply decisions that everyone has to make regarding where they live. If you choose the high income state, then you're choosing the high taxes and high cost of living that goes with it. That's the choice that YOU'VE made, so don't complain because other people made a different choice.
Life is always a choice... or series of choices.

Some have ties that are not financial per se... caring for elderly parents is one that I seem to find quite a few of my older friends doing...
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Old Today, 11:00 AM
 
6,657 posts, read 2,429,582 times
Reputation: 8412
Quote:
Originally Posted by Chas863 View Post
The way I see it is that ALL income taxes (federal, state, and social security) are based on your total income (with certain deductions and limitations).
Federal income tax has never been based on gross income, always on taxable income after various deductions for capital losses, carryovers, itemized or standard deductions, etc. The "don't tax the tax" philosophy has been expressed in the tax code for decades. They could change the law to make topline gross income taxable, but they haven't and there's no sign they will.

Quote:
Originally Posted by Chas863 View Post
You may not like the tax law change, but it is clear that it was done for equity purposes.
No. It was clearly a partisan hit on blue states. If they truly cared about tax equity they would change the tax code to ensure that companies like Amazon, Netflix, Chevron, GM, etc. -- all of whom paid $0 in taxes last year -- would always pay taxes. Same goes for the ultra-wealthy at the top who often pay real tax rates lower than the middle class. The SALT cap was selectively targeted to have the blue state Democratic donors pay more tax, while red state Repub donors were left unharmed. This was obvious to most.
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