These guys can basically hold a state hostage. <_<
http://www.nytimes.com/2016/05/01/business/one-top-taxpayer-moved-and-new-jersey-shuddered.html?_r=0
QuoteOne Top Taxpayer Moved, and New Jersey Shuddered
By ROBERT FRANKAPRIL 30, 2016
Our top-heavy economy has come to this: One man can move out of New Jersey and put the entire state budget at risk. Other states are facing similar situations as a greater share of income — and tax revenue — becomes concentrated in the hands of a few.
Last month, during a routine review of New Jersey's finances, one could sense the alarm. The state's wealthiest resident had reportedly "shifted his personal and business domicile to another state," Frank W. Haines III, New Jersey's legislative budget and finance officer, told a State Senate committee. If the news were true, New Jersey would lose so much in tax revenue that "we may be facing an unusual degree of income tax forecast risk," Mr. Haines said.
The New Jersey resident (unnamed by Mr. Haines) is the hedge-fund billionaire David Tepper. In December, Mr. Tepper declared himself a resident of Florida after living for over 20 years in New Jersey. He later moved the official headquarters of his hedge fund, Appaloosa Management, to Miami.
New Jersey won't say exactly how much Mr. Tepper paid in taxes. But according to Institutional Investor's Alpha, he earned more than $6 billion from 2012 to 2015. Tax experts say his move to Florida could cost New Jersey — which has a top tax rate of 8.97 percent — hundreds of millions of dollars in lost payments.
Mr. Tepper, 58, declined to comment on his move. He does have family — his mother and sister — who live in Florida. But several New Jersey lawmakers cited his relocation as proof that the state's tax rates, up from 6.37 percent in 1996, are chasing away the rich. Florida has no personal income tax.
"If you're making hundreds of millions of dollars and you're paying close to 10 percent to the state of New Jersey, you do the math," said Jon Bramnick, the Republican leader in the New Jersey Assembly. "You can save millions a year by moving to Florida. How can you blame him?"
Beyond the debate on taxing the rich, Mr. Tepper's move is a case study in how tax collections are affected when income becomes very highly concentrated. With the top tenth of 1 percent of the population reaping the largest income gains, states with the highest tax rates on the rich are growing increasingly dependent on a smaller group of superearners for tax revenue.
In New York, California, Connecticut, Maryland and New Jersey, the top 1 percent pay a third or more of total income taxes. Now a handful of billionaires or even a single individual like Mr. Tepper can have a noticeable impact on state revenues and budgets.
California had to account for a "Facebook effect" in 2012 and 2013 after that company's 2012 initial public offering of stock. The offering generated more than $1 billion in revenue — much of that from the chief executive, Mark Zuckerberg, and a small group of company shareholders. Washington, D.C., had an unexpected $50 million gain in its 2012 fiscal year — which helped create a budget surplus — after the death of a local billionaire increased its estate tax receipts.
Some academic research shows that high taxes are chasing the rich to lower-tax states, and anecdotes of tax-fleeing billionaires abound. But other studies say there is little evidence showing that the rich move solely for tax purposes. Millionaires and billionaires who move from the high-tax states in the Northeast to Florida, for instance, may be drawn by the sunshine, lifestyle and retirement culture, in addition to lower taxes.
While some high earners may be moving for tax reasons, New Jersey, New York, California and other states are replacing rich people faster than they are losing them. New Jersey had 237,000 millionaires in 2015, compared with 207,200 in 2006, according to Phoenix Marketing International, a research firm. New York added 69,500 millionaires from 2006 to 2015, to 437,900, while California added over 100,000 millionaires, to 772,600.
The best solution to the mega-taxpayer dilemma, some tax experts say, is for states to do a better job of tracking and forecasting the incomes of their top earners. Since the rich are the most mobile and are able to manage their investments just as easily in Miami as in Manhattan, states are devising new ways to monitor their top taxpayers and keep them from leaving.
"In a time of rising inequality, I'm not sure the right answer is lowering taxes or making them less progressive," said Kim S. Rueben, senior fellow of the Urban-Brookings Tax Policy Center at the Urban Institute. "It's more about keeping an eye on people, seeing where they are and enforcing the tax rules."
Connecticut, home to several hedge fund billionaires, now tracks the quarterly estimated payments of 100 of its top earners. Kevin B. Sullivan, commissioner of the Connecticut Department of Revenue Services, said about five or six of the highest earners could have a "measurable impact on the revenue stream."
Mr. Sullivan said that when one of the state's rich hedge fund executives planned to move his family and company to a lower-tax state, state officials met with him and persuaded him to leave some of his work force in Connecticut.
"We knew we were going to lose him," Mr. Sullivan said. "But we wanted to keep some of the higher-paying jobs." He said the state worked out a deal to keep the jobs in exchange for an agreement about the owner's regular visits to family and friends in Connecticut. (Homeowners who spend more than 183 days in the state are considered residents for tax purposes.) He said the state was holding discussions with other top earners in hopes of keeping them.
"I'm not saying we're sending fruit baskets and get-well cards," said Mr. Sullivan, a former Democratic legislator. "But we're trying to send a more welcoming message to the high earners as a group."
New York is now more closely monitoring wealthy taxpayers who have homes in New York but claim Florida as their tax residence. And New Jersey is collecting data on all of the taxpayers who make more than $1 million to forecast their tax payments more accurately.
In California, 5,745 taxpayers earning $5 million or more generated more than $10 billion of income taxes in 2013, or about 19 percent of the state's total, according to state officials.
"Any state that depends on income taxes is going to get sick whenever one of these guys gets a cold," Mr. Sullivan said.
Hence New Jersey's concern over Mr. Tepper's departure. Whatever the reasons for his move, he is leaving for Florida at an especially opportune time for tax savings. Many hedge fund managers have for years used a tax loophole that allowed them to defer taxes on fees they earned through the use of offshore funds. A 2008 federal tax rule, however, requires them to declare those fees by the end of 2017 and pay any necessary federal, state and local taxes.
For some hedge fund managers, the amounts declared will probably be in the billions of dollars, accountants say. A spokesman for Mr. Tepper declined to comment on his overseas income. By moving to Florida, Mr. Tepper could avoid paying state income taxes on any such funds.
"If he's bringing money back, you're talking about a big possible gain," Mr. Bramnick said. "So it's a good time to move to Florida."
Mr. Tepper regularly topped state wealth rankings as New Jersey's richest resident. He also has homes in Miami Beach and the Hamptons. In 2012 and 2013, he also topped Alpha's list of the highest-earning hedge fund managers, with estimated earnings of $2.2 billion in 2012 and $3.5 billion in 2013. His earnings fell to $400 million in 2014.
Mr. Tepper never publicly announced his move to Florida. But it became public on April 5, when Mr. Haines, citing a Bloomberg report, mentioned Mr. Tepper's move in his remarks to the State Senate Budget and Appropriations Committee. In discussing the move, Mr. Haines said, "Even a 1 percent forecasting error in the income tax estimate is worth $140 million."
Mr. Tepper's payments may have even been higher. If Mr. Tepper earned $3.5 billion in 2013, his state tax bill could have been over $300 million, according to New Jersey accountants. Granted, his actual payments were probably far lower because of deferred income, charitable deductions and other accounting treatments. Yet Mr. Haines's comments are believed to be the first time a state official has warned of a budget risk because of one resident's relocation.
"We've had states mention risks from high-income groups, but never from a single taxpayer," Ms. Rueben of the Tax Policy Center said.
Quote from: jimmy olsen on May 02, 2016, 06:43:14 PM
These guys can basically hold a state hostage. <_<
I think NJ will survive.
QuoteNew Jersey had 237,000 millionaires in 2015,
Quote from: jimmy olsen on May 02, 2016, 06:43:14 PM
These guys can basically hold a state hostage. <_<
What does this mean? If an individual contributes a sizeable share of a state's tax revenues they're not allowed to move?
Quote from: Admiral Yi on May 02, 2016, 07:18:06 PM
Quote from: jimmy olsen on May 02, 2016, 06:43:14 PM
These guys can basically hold a state hostage. <_<
What does this mean? If an individual contributes a sizeable share of a state's tax revenues they're not allowed to move?
Of course they should be allowed to move wherever they want. The <_< is not aimed at them, it's at the government that has mismanaged the economy to such an extent that income inequality has gotten so badly out of control that the problem exists.
Inequality is bad, but the article is trying to talk up a problem which isn't really there.
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
Quote from: jimmy olsen on May 02, 2016, 07:25:37 PM
Of course they should be allowed to move wherever they want. The <_< is not aimed at them, it's at the government that has mismanaged the economy to such an extent that income inequality has gotten so badly out of control that the problem exists.
What would proper management of the economy look like?
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
9% tax rate is screwing the rich?
Wait a second...this guy can live in New Jersey and pay hundreds of millions in state income taxes, or in Miami and pay nothing, and this guy is just now moving to Miami? The article says his mother and sister live in Florida--he must really have hated them to stay in New Jersey as long as he did.
Quote from: alfred russel on May 02, 2016, 08:29:45 PM
Wait a second...this guy can live in New Jersey and pay hundreds of millions in state income taxes, or in Miami and pay nothing, and this guy is just now moving to Miami? The article says his mother and sister live in Florida--he must really have hated them to stay in New Jersey as long as he did.
Agree. I am surprised that rich people stay so long in the cold, tax-heavy North.
I would expect there are large advantages for a hedge fund to be located in the greater NY area.
They should all move to Wyoming. No state income tax here.
Plus Wyoming doesn't really care if you live here at all to claim it as your "primary residence."
Quote from: alfred russel on May 02, 2016, 08:29:45 PM
Wait a second...this guy can live in New Jersey and pay hundreds of millions in state income taxes, or in Miami and pay nothing, and this guy is just now moving to Miami? The article says his mother and sister live in Florida--he must really have hated them to stay in New Jersey as long as he did.
Some don't like sweating all the time.
What's so bad about income inequality?
Seize the assets of the rich and redistribute them! Viva la revolution!
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
Quote from: HisMajestyBOB on May 03, 2016, 09:11:21 AM
Seize the assets of the rich and redistribute them! Viva la revolution!
Only those who can be demonstrated to be enemies of the people in a fair revolutionary tribunal :P
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
A state 9% top rate is pretty shitty.
Quote from: derspiess on May 03, 2016, 09:29:35 AM
A state 9% top rate is pretty shitty.
Civilization costs money.
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
0% income tax rate like Florida, if you define "taxes" as only income tax. ;)
I suspect Florida has higher property taxes, maybe?
Quote from: derspiess on May 03, 2016, 09:29:35 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
A state 9% top rate is pretty shitty.
how about 55%? :)
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
The most equal system: everyone pays exactly the same amount.
Quote from: viper37 on May 03, 2016, 09:56:41 AM
how about 55%? :)
Keep in mind we're talking state income tax rate and not federal, but yeah :yuk:
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
You don't see a connection between a tax policy and income inequality?
Quote from: viper37 on May 03, 2016, 09:56:41 AM
Quote from: derspiess on May 03, 2016, 09:29:35 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
A state 9% top rate is pretty shitty.
how about 55%? :)
The state 9% rate is in addition to a marginal federal rate of 39.6% and a marginal medicare rate of 2.35%.
Da feds are bleeding you dry.
Quote from: alfred russel on May 03, 2016, 10:03:09 AM
Quote from: viper37 on May 03, 2016, 09:56:41 AM
Quote from: derspiess on May 03, 2016, 09:29:35 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
A state 9% top rate is pretty shitty.
how about 55%? :)
The state 9% rate is in addition to a marginal federal rate of 39.6% and a marginal medicare rate of 2.35%.
Aren't state income tax deduced from the Federal income tax?
Correct from Vipes.
Plus those are all rates on taxable ordinary income. No self-respecting billionaire would be earning something as mundane as that.
Soon: New Jersey to demand labor instead of gold for tax burden, forces prominent hedge fund manager to run state pension fund for 2 months per year.
Quote from: Hamilcar on May 03, 2016, 12:11:25 PM
Soon: New Jersey to demand labor instead of gold for tax burden, forces prominent hedge fund manager to run state pension fund for 2 months per year.
:lol:
Quote from: viper37 on May 03, 2016, 10:19:35 AM
Quote from: alfred russel on May 03, 2016, 10:03:09 AM
Quote from: viper37 on May 03, 2016, 09:56:41 AM
Quote from: derspiess on May 03, 2016, 09:29:35 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
A state 9% top rate is pretty shitty.
how about 55%? :)
The state 9% rate is in addition to a marginal federal rate of 39.6% and a marginal medicare rate of 2.35%.
Aren't state income tax deduced from the Federal income tax?
No. State income taxes are deducted from federal income in the following year, but not from taxes.
You can deduct state taxes paid during the taxable year from income on your federal return. Thus, the marginal rate is not additive.
Quote from: The Minsky Moment on May 03, 2016, 06:20:44 PM
You can deduct state taxes paid during the taxable year from income on your federal return. Thus, the marginal rate is not additive.
I would have thought that in order not to be additive state taxes would have to be deductible from federal tax, not federal income on which tax is assessed. I.e., a tax credit as opposed to an income deduction.
Quote from: The Minsky Moment on May 03, 2016, 06:20:44 PM
You can deduct state taxes paid during the taxable year from income on your federal return. Thus, the marginal rate is not additive.
Why are the States in a rush to the bottom if the Feds take a hair cut based on State tax policy? Canadian provinces would love to have that system.
Quote from: crazy canuck on May 03, 2016, 06:48:16 PM
Why are the States in a rush to the bottom if the Feds take a hair cut based on State tax policy? Canadian provinces would love to have that system.
Canadian provinces, even the conservative ones, like to provide services to their residents.
Quote from: Admiral Yi on May 03, 2016, 06:28:20 PM
Quote from: The Minsky Moment on May 03, 2016, 06:20:44 PM
You can deduct state taxes paid during the taxable year from income on your federal return. Thus, the marginal rate is not additive.
I would have thought that in order not to be additive state taxes would have to be deductible from federal tax, not federal income on which tax is assessed. I.e., a tax credit as opposed to an income deduction.
Extreme example time: if Bernie is elected, and both NJ and federal tax rates are flat 100%, but exemptions stay as they are, do I pay 100% or 200% in taxes?
Quote from: Peter Wiggin on May 03, 2016, 06:58:47 PM
Quote from: crazy canuck on May 03, 2016, 06:48:16 PM
Why are the States in a rush to the bottom if the Feds take a hair cut based on State tax policy? Canadian provinces would love to have that system.
Canadian provinces, even the conservative ones, like to provide services to their residents.
Yes. And if States can do it essentially on the Feds dime, why not?
Quote from: crazy canuck on May 03, 2016, 07:01:41 PM
Quote from: Peter Wiggin on May 03, 2016, 06:58:47 PM
Quote from: crazy canuck on May 03, 2016, 06:48:16 PM
Why are the States in a rush to the bottom if the Feds take a hair cut based on State tax policy? Canadian provinces would love to have that system.
Canadian provinces, even the conservative ones, like to provide services to their residents.
Yes. And if States can do it essentially on the Feds dime, why not?
No, they don't do it on Feds dime. State taxes paid are subtracted from federal income, not from federal tax burden. Feds do in effect fund some of state taxes, but far from all of them.
Quote from: crazy canuck on May 03, 2016, 07:01:41 PM
Yes. And if States can do it essentially on the Feds dime, why not?
Ideological purity. Like all the state governors rejecting Medicaid expansion from Obamacare.
Quote from: DGuller on May 03, 2016, 07:05:58 PM
Quote from: crazy canuck on May 03, 2016, 07:01:41 PM
Quote from: Peter Wiggin on May 03, 2016, 06:58:47 PM
Quote from: crazy canuck on May 03, 2016, 06:48:16 PM
Why are the States in a rush to the bottom if the Feds take a hair cut based on State tax policy? Canadian provinces would love to have that system.
Canadian provinces, even the conservative ones, like to provide services to their residents.
Yes. And if States can do it essentially on the Feds dime, why not?
No, they don't do it on Feds dime. State taxes paid are subtracted from federal income, not from federal tax burden. Feds do in effect fund some of state taxes, but far from all of them.
You misunderstand my point. If state taxes are deducted from Federal taxes then why wouldn't States charge what they can to maximize local benefit at the expense of the Feds? Is there a limit on the deduction?
Quote from: crazy canuck on May 03, 2016, 06:48:16 PM
Quote from: The Minsky Moment on May 03, 2016, 06:20:44 PM
You can deduct state taxes paid during the taxable year from income on your federal return. Thus, the marginal rate is not additive.
Why are the States in a rush to the bottom if the Feds take a hair cut based on State tax policy? Canadian provinces would love to have that system.
Because they also compete with each other Swiss canton style for tax sensitive business, as per the OP.
Quote from: crazy canuck on May 03, 2016, 07:14:05 PM
Quote from: DGuller on May 03, 2016, 07:05:58 PM
Quote from: crazy canuck on May 03, 2016, 07:01:41 PM
Quote from: Peter Wiggin on May 03, 2016, 06:58:47 PM
Quote from: crazy canuck on May 03, 2016, 06:48:16 PM
Why are the States in a rush to the bottom if the Feds take a hair cut based on State tax policy? Canadian provinces would love to have that system.
Canadian provinces, even the conservative ones, like to provide services to their residents.
Yes. And if States can do it essentially on the Feds dime, why not?
No, they don't do it on Feds dime. State taxes paid are subtracted from federal income, not from federal tax burden. Feds do in effect fund some of state taxes, but far from all of them.
You misunderstand my point. If state taxes are deducted from Federal taxes then why wouldn't States charge what they can to maximize local benefit at the expense of the Feds? Is there a limit on the deduction?
IIRC it gets added back in for the federal AMT calculation so that is a practical limit of sorts.
Quote from: crazy canuck on May 03, 2016, 07:14:05 PM
You misunderstand my point. If state taxes are deducted from Federal taxes then why wouldn't States charge what they can to maximize local benefit at the expense of the Feds? Is there a limit on the deduction?
Because the taxpayers still pay more with increased state tax rates?
Quote from: crazy canuck on May 03, 2016, 07:14:05 PM
You misunderstand my point. If state taxes are deducted from Federal taxes then why wouldn't States charge what they can to maximize local benefit at the expense of the Feds? Is there a limit on the deduction?
State taxes are not deducted from federal taxes. They are deducted from federal taxable income (i.e. you don't pay federal income tax on the money you send to the states - nor, in most states, vice-versa).
Quote from: grumbler on May 04, 2016, 06:43:02 AM
Quote from: crazy canuck on May 03, 2016, 07:14:05 PM
You misunderstand my point. If state taxes are deducted from Federal taxes then why wouldn't States charge what they can to maximize local benefit at the expense of the Feds? Is there a limit on the deduction?
State taxes are not deducted from federal taxes. They are deducted from federal taxable income (i.e. you don't pay federal income tax on the money you send to the states - nor, in most states, vice-versa).
That is an important clarification. But if the amount of state tax paid is deducted from federal taxable income then the amount of federal tax paid will be less. So doesn't that have the same practical effect?
Quote from: crazy canuck on May 04, 2016, 09:05:16 AM
Quote from: grumbler on May 04, 2016, 06:43:02 AM
Quote from: crazy canuck on May 03, 2016, 07:14:05 PM
You misunderstand my point. If state taxes are deducted from Federal taxes then why wouldn't States charge what they can to maximize local benefit at the expense of the Feds? Is there a limit on the deduction?
State taxes are not deducted from federal taxes. They are deducted from federal taxable income (i.e. you don't pay federal income tax on the money you send to the states - nor, in most states, vice-versa).
That is an important clarification. But if the amount of state tax paid is deducted from federal taxable income then the amount of federal tax paid will be less. So doesn't that have the same practical effect?
Didn't a number of people already point out the same thing? :huh:
And yes, there is a practical difference between the Feds paying for 25% of the state tax and 100% of the state tax. It seems fairly obvious. :huh:
Quote from: DGuller on May 04, 2016, 09:26:28 AM
Quote from: crazy canuck on May 04, 2016, 09:05:16 AM
Quote from: grumbler on May 04, 2016, 06:43:02 AM
Quote from: crazy canuck on May 03, 2016, 07:14:05 PM
You misunderstand my point. If state taxes are deducted from Federal taxes then why wouldn't States charge what they can to maximize local benefit at the expense of the Feds? Is there a limit on the deduction?
State taxes are not deducted from federal taxes. They are deducted from federal taxable income (i.e. you don't pay federal income tax on the money you send to the states - nor, in most states, vice-versa).
That is an important clarification. But if the amount of state tax paid is deducted from federal taxable income then the amount of federal tax paid will be less. So doesn't that have the same practical effect?
Didn't a number of people already point out the same thing? :huh:
And yes, there is a practical difference between the Feds paying for 25% of the state tax and 100% of the state tax. It seems fairly obvious. :huh:
Sure but that still doesn't answer my question. Since the Feds are effectively subsidizing a portion of the State tax, why the race to bottom in States that could use that tax money? Since those taxes are being paid in any event, why leave money on the table for the Feds? I accept that at some point there are diminishing returns but this seems a good example of ideology getting in the way of good fiscal planning - at the State level anyway.
And from the Federal government's perspective, what do they get out of the arrangement? Is this a taxation policy that is required by the US constitution or is it something the Federal level does voluntarily?
Quote from: crazy canuck on May 04, 2016, 10:45:23 AM
Sure but that still doesn't answer my question. Since the Feds are effectively subsidizing a portion of the State tax, why the race to bottom in States that could use that tax money?
Just because someone is subsidizing something doesn't mean that you can immediately load up to the hilt with what is being subsidized. Sometimes a subsidy is not enough to entice you to get any quantity regardless. The state residents still have to pony up the majority of the state tax.
QuoteSince those taxes are being paid in any event, why leave money on the table for the Feds?
No, these taxes are "not being paid in any event". If the state increases the tax rate, the state residents are going to pay more in taxes. So most of these taxes are only going to be paid in the event the state raises its tax rate, not any event.
Top tax rate of 9% ...... taxes are too high and scaring away the rich :lol:
Am I missing something here? 9% seems crazy low even for a normal person.
Quote
The state 9% rate is in addition to a marginal federal rate of 39.6% and a marginal medicare rate of 2.35%.
That's a relief
Quote from: Tyr on May 04, 2016, 11:02:46 AM
Top tax rate of 9% ...... taxes are too high and scaring away the rich :lol:
Am I missing something here? 9% seems crazy low even for a normal person.
That is the State Income Tax on top of the Federal Income Tax (well not exactly because of how complicated the US tax structure is....)
Quote from: derspiess on May 03, 2016, 09:29:35 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
A state 9% top rate is pretty shitty.
Yeah, it was so shitty he was able to become a multi-billionaire while operating under that oh so onerous burden. Poor guy.
Quote from: viper37 on May 03, 2016, 09:56:16 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
0% income tax rate like Florida, if you define "taxes" as only income tax. ;)
I suspect Florida has higher property taxes, maybe?
Florida has a crapload of tourism, and the state generates a lot of tax revenue on taxes of that tourism (hotels and such).
Quote from: Valmy on May 04, 2016, 11:04:23 AM
Quote from: Tyr on May 04, 2016, 11:02:46 AM
Top tax rate of 9% ...... taxes are too high and scaring away the rich :lol:
Am I missing something here? 9% seems crazy low even for a normal person.
That is the State Income Tax on top of the Federal Income Tax (well not exactly because of how complicated the US tax structure is....)
wouldn't it be simpler to reduce the tax rate and forget about the deduction?
Quote from: Berkut on May 04, 2016, 12:48:37 PM
Quote from: viper37 on May 03, 2016, 09:56:16 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
0% income tax rate like Florida, if you define "taxes" as only income tax. ;)
I suspect Florida has higher property taxes, maybe?
Florida has a crapload of tourism, and the state generates a lot of tax revenue on taxes of that tourism (hotels and such).
ah, I see my fellow Quebecers are not so adverse to taxes after all ;)
Quote from: Berkut on May 04, 2016, 12:47:21 PM
Quote from: derspiess on May 03, 2016, 09:29:35 AM
Quote from: Valmy on May 03, 2016, 09:14:35 AM
Quote from: derspiess on May 02, 2016, 07:54:04 PM
So Tim, income inequality is the problem here and not a tax structure that relies on screwing the rich?
:lol:
What sort of tax structure would involve somebody who makes 6 billion dollars not paying millions in taxes? :hmm:
The magical mystery tax code.
A state 9% top rate is pretty shitty.
Yeah, it was so shitty he was able to become a multi-billionaire while operating under that oh so onerous burden. Poor guy.
He could be worth 6.5 billion if it wasn't of this unfair tax!
Quote from: viper37 on May 04, 2016, 01:38:27 PM
wouldn't it be simpler to reduce the tax rate and forget about the deduction?
Yeah we keep trying to do that but people love their deductions.
Quote from: Valmy on May 04, 2016, 03:16:42 PM
Quote from: viper37 on May 04, 2016, 01:38:27 PM
wouldn't it be simpler to reduce the tax rate and forget about the deduction?
Yeah we keep trying to do that but people love their deductions.
Not paying income taxes on the "income" you pay in taxes is not the most egregious of tax deductions. Even countries that don't generally have much in the way of deductions often allow deductions for money paid elsewhere in taxes. Now, being able to deduct for health insurance premiums, educational expenses, and home mortgage interest are a lot less defensible.
The state sales taxes are also deductable, so whether states choose to tax income or sales the money left on the table issue is the same. Since most people probably take the standard deduction, it's probably better for the states to get their revenue from sales taxes since that method provides more revenue for government at both levels. (The standard deduction providing a window of non-offset in that case).
Edit: By that I mean a person can pay x amount of sales tax in a year before it begins to affect their federal taxable income via deduction, and most people rarely reach that amount.