[net.taxes] Merge state and federal income tax returns

pmontgom (04/19/83)

Subject: Merge state and federal income tax returns

    Every year we report our income to the IRS and to our states.  I moved
in 1982, and filed three 1982 returns (with different instructions).  Let's
merge these into one return.  The IRS can forward the money to our states.

    Specifically, modify federal tax codes to allow any state (or
municipality) to specify that the income tax for its residents will be a
straight percentage of the federal income tax (line 38 of 1982 form 1040).
For part year residents, this would be multiplied by the fraction of the
year one lived there.  Suppose State A charges 15% and State B charges
30%.  If one lives six months in each and his line 38 is $10000, he enters

	State          Percent          State            Tax
		       residency        rate             due

	A               50%             15%             $ 750
	B               50%             30%             $1500
							-----
							$2250

and pays $2250 more to the IRS.  His employers would have sent all
withholdings to the IRS, so he has only one set of withholdings to sum.
He files only one estimated tax form, if any.  States can reduce their
staffs and their printing and postage costs.

    Progressive tax advocates should not object, since if the federal tax
is progressive then any fixed percentage of it is so.  This would be
voluntary on the states (a state not participating can set a rate of zero
and collect the old way), so states rights advocates should not object.

	      Peter Montgomery      ...sdcsvax!sdccsu3!sdcrdcf!pmontgom

johnson (04/22/83)

The Canadian provinces have been letting their federal government collect
their taxes (as a percentage of individuals' adjusted federal income) for
many years.  The wealthy provinces (e.g., Alberta) have a low rate, whereas
the poorer provinces have a high rate.  The federal government tolerates
some addition various among provinces by permiting province-specific tax
credits.  British Columbia, for example, use to have a renters' tax credit;
they now have a provincial political contributions tax credit.

If you change provinces during the year, the "winner" (i.e., the one you
reside in on December 31) gets all your provincial tax.  Somewhat unfair,
but easy to administer.

dkw (04/22/83)

In Rhode Island, in most cases state income tax is a percentage ( about 20 %)
of the federal tax.  Quite simple except for non-residents and people who move
in or out of the state

raz (04/22/83)

How about an even simpler idea?

_______________________________________________________________________________
Name, address, etc
_______________________________________________________________________________

	Wages, Salaries, tips, capital gains,
	dividends, gambling winnings, interest,
	found sidewalk change, etc .............. $ _______ . __

	Lookup tax based in appendix I .......... $ _______ . __

	Subtract taxes withheld  ................ $ _______ . __

sign here _____________________________ date ___________

______________________________________________________________________________

			On behalf of realistic libertarians everywhere,

			Robert A Zimmermann

dave (04/24/83)

Slight correction to the claim about the Canadian provinces: that excludes
Quebec, where residents have to file two returns. However, for all provinces
except Ontario and Quebec, provincial CORPORATE income tax is also piggy-backed
on the federal return. Makes things easy.