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That's a tough question WU, we don't have much to deduct, but for others such as the self-employed, the deductions are plentiful. I have a friend who is an independent truck driver without a mortgage and when his accountant is finished this guy is dirt poor on paper.
Where I bolded is spot on; the revenues are down so the taxes need to go up, but it sucks. When the revenue stream comes back to normal then taxes can be reduced.
That is what the mortgage interest and child tax credits are; behavior deductions.
Truck drivers are transportation workers. He can deduct a lot because the company most likely is not paying M&IE rates and he'll collect 80% of the difference.
Example, and I'm not a truck driver but I do work in transportation,I believe this is how it would work for them:
$59/night in federal M&IE rate. If trucker does not get per diem, and he is on the road for 250 days a year in overnight trips, he can deduct 80% of the difference, $59 x 250 x 80% = $11,800.
This is categorized as a business expense and can be itemized.
truck drivers are transportation workers. He can deduct a lot because the company most likely is not paying m&ie rates and he'll collect 80% of the difference.
Example, and i'm not a truck driver but i do work in transportation,i believe this is how it would work for them:
$59/night in federal m&ie rate. If trucker does not get per diem, and he is on the road for 250 days a year in overnight trips, he can deduct 80% of the difference, $59 x 250 x 80% = $11,800.
This is categorized as a business expense and can be itemized.
First, I don't feel the government should tax to encourage/discourage behavior. I find it an assualt on freedom of choice.
Taxing things does not "assault" your freedom of choice, Wheels. One makes their choices throughout life based upon what's available, and how much the various selections cost. Your "freedom of choice" has always, and always will be controlled to a great extent by those in power. Think oil/gas, without whose subsidies might've been a secondary fuel by now, as prices would've been much much higher many decades ago. Changing a price (especially through taxation) does not remove that choice, it makes one re-evaluate their selection.
The purpose of a tax is to pay for things imposed by government, supposedly for the good of a society. I admit I question many of our governments' choices, and feel the bi-partisan corruption has really gone through the roof these past ten years (maybe more), but ultimately, the government needs funding in order to supply certain services, and taxation is the main source for this revenue.
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Originally Posted by wheelsup
Secondly, taxing behavior doesn't seem to work very well. Look at cigarettes. $4.35 tax per PACK in NY state (plus additional for NYC), smoking rate 19%. $0.30 tax per pack in VA, smoking rate...wait for it...19%.
If a $4/pack difference doesn't discourage smoking, what would? Kinda blows your argument out of the water.
Okay, here, you are actually negating your opening line regarding freedom of choice, by showing (with an erred example) that taxation of cigarettes has not affected their usage. I agree with this, but not using your example. Your example, comparing a static snapshot of cigarette usage between two entirely different states is unsound. If you wish to find price elasticity, you cannot easily do so by using such methodology. A far better example would be to show how taxation in NY changed a behavior by showing NY's smoking percentages before and after the imposition of the tax. Elasticity measurement must be done using the same sample, with similar disposable income, and similar constraints (such as public acceptance). By comparing NY to VA in one static snapshot, you cannot determine how much the additional taxes have affected either state.
But beyond this erroneous logic, I DO agree with you in that taxation might not affect usage (or choice) of a product. You see, governments use knowledge of price elasticity to determine how much tax they can impose while having the least effect on consumer behavior. NY's taxation did not come about in one fell swoop of $4.35 per pack. It was imposed in smaller amounts, over time, so that product usage rates would not measurably drop. This is done to assure that the greatest additional revenue will continue to be seen. Why raise the price so much that people actually quit? Then you would lose the revenue stream. No ... taxation does NOT remove your freedom of choice, but it is SUPPOSED to help defray costs in the future. SUPPOSEDLY, NY/NJ were to use the additional tax to help defer costs that smokers were adding to healthcare. Unfortunately, it is more likely lining pockets of already super rich individuals and corporations through various sketchy and shady dealings I won't get into here.
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Originally Posted by wheelsup
Thirdly, despite your negative attitude towards those who consume fast food re: medical expenses, studies have shown those folks actually cost less long term than quote/unquote "healthy" individuals because of the long term diseases associated like MS, Alzheimers, etc.
Interesting reading at least, and thoughts to ponder.
Very interesting article (note, though, this was ONE study, though, not "studies" (plural) as you wrote in your post. But actually, it is something I have always surmised, as we ALL die of something, eventually. Thanks for sharing it with us as I missed it, having let my own NY Times subscription expire of late.
All the same, I will stick by my main thoughts on this, that being if the GA feels we should increase sales taxes, I feel it in unconscionable to tax necessities, and that additional taxes, if they are deemed needed, should be imposed or increased only on luxury, entertainment, and "sin"-based items, such as alcohol and tobacco.
I also feel that more of these "sin" types of items would better serve the government coffers by legalizing them and then legitimately taxing them (think cannabis, gambling, prostitution), rather than COSTING government dollars to police, process and incarcerate.
Finally, (and probably very unpopular here in NC) another great NEW source of revenue might come from taxation of the myriad churches found across the state. Why let such institutions get a free ride?
Taxing things does not "assault" your freedom of choice, Wheels. One makes their choices throughout life based upon what's available, and how much the various selections cost. Your "freedom of choice" has always, and always will be controlled to a great extent by those in power. Think oil/gas, without whose subsidies might've been a secondary fuel by now, as prices would've been much much higher many decades ago. Changing a price (especially through taxation) does not remove that choice, it makes one re-evaluate their selection.
IMO, putting an extremely large (as percentage of retail price) tax on something IS effecting my freedom of choice. The cost is arbitrarily increased based upon not market forces but an entity deciding that it doesn't want people to do the activity, thereby discouraging it by making it impossibly expensive to do so. Gun control is a great example - the thought is make bullets too expensive to buy and you don't have to regulate or worry about guns (not arguing for or against).
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The purpose of a tax is to pay for things imposed by government, supposedly for the good of a society. I admit I question many of our governments' choices, and feel the bi-partisan corruption has really gone through the roof these past ten years (maybe more), but ultimately, the government needs funding in order to supply certain services, and taxation is the main source for this revenue.
If the purpose of a tax is to solely fund government, what is the purpose of a credit? To unfund (yes I know that isn't a word) it?
I disagree with your simplistic viewpoint. Governments use taxes/levies as well as credits to alter human behavior, not just fund government in many cases. The mortgage interest deduction is a great example, as is the child tax credit. How 'bout that free $8,000 home buyers tax credit that came out a few years ago? How about Cash 4 Clunkers? What was that designed to encourage? You can't tell me with a straight face NY isn't trying to get people to stop smoking by imposing a $4/pack tax (look at recent attempts to regulate beverage sizes in NYC).
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Okay, here, you are actually negating your opening line regarding freedom of choice, by showing (with an erred example) that taxation of cigarettes has not affected their usage.
It shows that a 1450% increase in tax rates don't deter people from smoking. It indicates an attempt to deter however. What if the tax was moved from $4.35 to $43.50. Do you feel that would effect usage? What if your favorite thing to do was to watch TV, but 'the government' decided in order to get people out and off the couch it will tax cable at at $500/month surcharge. It's not making it illegal, just impossible for a family to buy economically.
It's a scary road to go down. We are a Republic, not a Democacy, for just this reason (ie mob rule).
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I agree with this, but not using your example. Your example, comparing a static snapshot of cigarette usage between two entirely different states is unsound.[If you wish to find price elasticity, you cannot easily do so by using such methodology. A far better example would be to show how taxation in NY changed a behavior by showing NY's smoking percentages before and after the imposition of the tax. Elasticity measurement must be done using the same sample, with similar disposable income, and similar constraints (such as public acceptance). By comparing NY to VA in one static snapshot, you cannot determine how much the additional taxes have affected either state.
I agree, yet disagree. I personally felt that the large difference in price structure should have enough effect to at least lower NY state's smoking rate below average norms (20%). Yet it is very close in line with the average smoking rate of the entire country (as is VA).
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Unfortunately, it is more likely lining pockets of already super rich individuals and corporations through various sketchy and shady dealings I won't get into here.
Very interesting article (note, though, this was ONE study, though, not "studies" (plural) as you wrote in your post. But actually, it is something I have always surmised, as we ALL die of something, eventually. Thanks for sharing it with us as I missed it, having let my own NY Times subscription expire of late.
I honestly didn't think you wanted to read all of them. To make you happy however, here is one more, that makes two so far. If you want you may search for however many please you.
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However, an analysis of the simulated lifetime health-care-cost histories shows that the opposite is the case – the currently healthy have higher lifetime costs.
All the same, I will stick by my main thoughts on this, that being if the GA feels we should increase sales taxes, I feel it in unconscionable to tax necessities, and that additional taxes, if they are deemed needed, should be imposed or increased only on luxury, entertainment, and "sin"-based items, such as alcohol and tobacco.
I also feel that more of these "sin" types of items would better serve the government coffers by legalizing them and then legitimately taxing them (think cannabis, gambling, prostitution), rather than COSTING government dollars to police, process and incarcerate.
I don't think you will find much argument there, from the majority of the population. We all know however that the Feds can't do an about-face on drugs, they would look like fools, not to mention the loss of jobs (!) that would occur if we were to downsize the drug enforcement arms of the US government. Basically political suicide, since wanting to legalize it (or rather, "un-illegalize" it) would in some room in spin world, be the same as encouraging it.
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Finally, (and probably very unpopular here in NC) another great NEW source of revenue might come from taxation of the myriad churches found across the state. Why let such institutions get a free ride?
IMO, putting an extremely large (as percentage of retail price) tax on something IS effecting my freedom of choice. The cost is arbitrarily increased based upon not market forces but an entity deciding that it doesn't want people to do the activity, thereby discouraging it by making it impossibly expensive to do so.
.............or to cause people to do an activity such as; reproduce, donate, buy homes.
Has anyone crunched the numbers to see what the actual impact is of the proposed income tax reductions? After all, they're proposing cutting out the 7.75% rate (which is for anyone middle-class) and changing it to 5.25% for the vast majority of taxpayers. Taxable income below $10 or 20k, IIRC, would pay no income tax.
So, if you remove the deduction for mortgage interest, the decrease in your income tax by going from 7.75% to 5.25% would be greater than you'd have gotten with the original deduction.
It's also disingenuous to say we'd lose the property tax deduction, as I read on the NCDOR site that property taxes aren't deductible to begin with...
Has anyone crunched the numbers to see what the actual impact is of the proposed income tax reductions? After all, they're proposing cutting out the 7.75% rate (which is for anyone middle-class) and changing it to 5.25% for the vast majority of taxpayers. Taxable income below $10 or 20k, IIRC, would pay no income tax.
So, if you remove the deduction for mortgage interest, the decrease in your income tax by going from 7.75% to 5.25% would be greater than you'd have gotten with the original deduction.
It's also disingenuous to say we'd lose the property tax deduction, as I read on the NCDOR site that property taxes aren't deductible to begin with...
Yes, but I'm talking about the NC deductions, not the Federal ones.
I'm a Realtor and I'm not on-board with their arguments because I'm also Libertarian (though not hard-line - we do need to have some services). What I'm interested in is cutting through the demagoguery and trying to determine what the loss of the tax deductions are, compared with the savings realized by cutting the income tax rate by two percentage points.
I'm willing to bet that most folks would save more with the lower rate and no deductions.
NH has no sales or income tax. Top rated schools. Wonder how they do it. "Live free or die".
Demographics.
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