js2j@mhuxt.UUCP (sonntag) (05/30/85)
> How does every one feel about Regans idea of > disallowing State Taxes as a deduction ? > > Sounds like double Taxation to Me. Perhaps > we should all write our congressman. Seems like one of the best ideas I've *ever* heard come out of Ronnie Ray-gun. Consider: the marginal cost to a local government of each citizen is highest when the population density is highest. (else why are NJ, NY, NYC, CA, etc. the places with the highest local taxes?) Some people choose to live in these places anyway, for whatever reason, and end up paying more to their local governments in taxes than people who live more rural areas. They receive more services from their local governments as a result: better police protection, fire departments, garbage pickup, etc. Up till now, the federal government has been forcing people who live in low-local-tax areas to subsidize the taxes of the people who choose to live in the high-local-tax areas. Disallowing state taxes as a deduction would stop this. Do you really think that it was fair for you to force all of the people in the midwest to help pay your local taxes? I don't. -- Jeff Sonntag ihnp4!mhuxt!js2j "It doesn't matter what you wear, just as long as you are there." - Martha and the Vandellas
ped@mtuxo.UUCP (p.davidson) (05/30/85)
How does every one feel about Regans idea of disallowing State Taxes as a deduction ? Sounds like double Taxation to Me. Perhaps we should all write our congressman.
mjk@ttrdc.UUCP (Mike Kelly) (05/31/85)
>From: js2j@mhuxt.UUCP (sonntag) writing about the state tax deduction: >Consider: the marginal cost to a local government of each citizen >is highest when the population density is highest. (else why are NJ, NY, NYC, >CA, etc. the places with the highest local taxes?) Some people choose to >live in these places anyway, for whatever reason, and end up paying more to >their local governments in taxes than people who live more rural areas. I think this may be a case of "a and b, therefore a->b". I don't know whether population density has anything to do with tax rate, but density of low-income people does. In Illinois (not a dense state, but a large one), the single largest line item in our state budget is public aid. I expect that may be true in the other large states you mentioned as well. The cities (New York, Chicago, Los Angeles) have always been destinations for the poor seeking jobs. Of course, a proper sense of national justice would establish pay for the national public aid programs with national taxes. But that isn't how it works, and it's working even less that way under Reagan. The states are receiving increasing responsibility for their poor, sick and jobless residents. The state and local tax deduction was one way of mitigating the taxes needed to pay for those services. By taking that away, Reagan will make it even harder for the states to pay for services for their residents. The result will likely be cutbacks and yet another gaping hole in the "safety net." I'm all for tax reform. But the Reagan program seems to do more of what Reagan does best: hurt poor people. The supposed cuts in tax rates for low- income people don't amount to much in real dollars; the poor don't pay a lot of taxes now. But the cuts in services that will probably result from this plan will very definitely hurt. By the way, an analysis in today's Chicago Tribune shows that the President's plan helps the very poor (because it costs almost nothing and deflects political criticism) and the very rich (because it's from Reagan) the most. 25% of middle income taxpayers (and 32% of upper middle income taxpayers) would see their taxes increase under the Reagan plan, primarily because of the loss of deduction of state and local taxes. Mike Kelly
tw8023@pyuxii.UUCP (T Wheeler) (05/31/85)
Consider this, everyone who might think the new ideas about state and local taxes will be double taxation. State and local taxes in many states ARE now double taxation. When you do your state and local taxes (at least in NJ) you cannot deduct your Federal taxes. This is the reverse of the coin Reagan is proposing flip. For those folks who live in those high tax states (and I do ), perhaps a move to reform the state and local taxes should also be pushed. I rather like the new proposals even though I will more than likely have to cough up more every April. I feel that even if I do for a few years, I will probably end up paying less in the long run as my income changes and circumstances change. I`m all for a change that will force a company like Prudential to pay more than $4.00 and some odd cents (1984 tax bite) on over a billion in gross revenue. T. C. Wheeler
mcal@ihuxb.UUCP (Mike Clifford) (05/31/85)
> > How does every one feel about Regans idea of > > disallowing State Taxes as a deduction ? > > > > Sounds like double Taxation to Me. Perhaps > > we should all write our congressman. > > Consider: the marginal cost to a local government of each citizen > is highest when the population density is highest. (else why are NJ, NY, NYC, > CA, etc. the places with the highest local taxes?) (these) people choose to > ... pay more to > their local governments in taxes than people who live more rural areas. They > receive more services from their local governments as a result: better > police protection, fire departments, garbage pickup, etc. > Up till now, the federal government has been forcing people who live in > low-local-tax areas to subsidize the taxes of the people who choose to live > in the high-local-tax areas. Disallowing state taxes as a deduction would > stop this. Do you really think that it was fair for you to force all of the > people in the midwest to help pay your local taxes? I don't. > -- > Jeff Sonntag Am I just completely dense (don't answer that!)? How is it that the low-local tax areas are subsidizing the high-local-tax areas? Everyone who itemizes gets to deduct their state tax. Where does this subsidy business occur? Mike Clifford
js2j@mhuxt.UUCP (sonntag) (05/31/85)
> > Up till now, the federal government has been forcing people who live in > > low-local-tax areas to subsidize the taxes of the people who choose to live > > in the high-local-tax areas. Disallowing state taxes as a deduction would > > stop this. Do you really think that it was fair for you to force all of the > > people in the midwest to help pay your local taxes? I don't. > > -- > > Jeff Sonntag > Am I just completely dense (don't answer that!)? How is it that the low-local > tax areas are subsidizing the high-local-tax areas? Everyone who itemizes > gets to deduct their state tax. Where does this subsidy business occur? > Mike Clifford It works like this: Person A, living in NYC, pays high local taxes. Under current tax laws, they deduct this amount from their gross income, reducing the amount of federal taxes they pay. The net effect is that their local tax costs them (1 - their marginal tax rate) * (nominal local tax) instead of the full amount. That difference is money which the federal government doesn't receive; they know this will happen, and adjust tax rates so that they get the total amount of money they want anyway. This means, of course, that federal tax rates must be higher than they would be otherwise to make up the difference. So all of the farmers in Nebraska, receiving *none* of the benefits which person A receives for his local taxes, have to pay higher federal taxes to make up for person A's local-tax deduction. Those of you who think taxes should be *fair* should like this since it *is* more fair than the current setup. Those of you who think taxes should come from the rich should like this since the high-income people will be the ones primarily affected. (the difference in taxes is: (their marginal federal tax rate) * (their local tax). The first term is progressive with income, the second is usually linear, so the product should be *much* larger for high income people than for low.) -- Jeff Sonntag ihnp4!mhuxt!js2j "It doesn't matter what you wear, just as long as you are there." - Martha and the Vandellas
joel@peora.UUCP (Joel Upchurch) (05/31/85)
> Ray-gun. Consider: the marginal cost to a local government of each citizen > is highest when the population density is highest. (else why are NJ, NY, NYC, > CA, etc. the places with the highest local taxes?) Some people choose to Actually the highest state tax rate is in Minnesota. It maxes out at 16%. Of course, if you live in New York City then your total tax bill will be higher. I once considered a job in Minnesota, until I realized that it would take several thousands dollars a year more, just to make up the difference in the tax rates. There is no state income tax in Florida.
mrl@drutx.UUCP (LongoMR) (05/31/85)
It seems to me that this would be fair IF all states received the same amount of federal aid. I don't know whether that is the case, but one would think that the more a state could do for itself, the less federal money it would require for "state-supported" programs. Therefore, states without income tax would, in effect, be getting MORE from the federal government. Please, no flames -- intelligent answers to the net -- I am not an expert on these matters, I only throw this out for comment... Mark Longo AT&T Denver
wfl@maxvax.UUCP (w linke) (05/31/85)
[] >From: ped@mtuxo.UUCP (p.davidson) >Newsgroups: net.misc,net.politics >Subject: State Tax Dedudction > > How does every one feel about Regans idea of >disallowing State Taxes as a deduction ? > > Sounds like double Taxation to Me. Perhaps >we should all write our congressman. Double taxation? We've already got that; the State won't let me deduct my Federal taxes!
lrd@drusd.UUCP (L. R. DuBroff) (05/31/85)
>Consider: the marginal cost to a local government of each citizen >is highest when the population density is highest. (else why are NJ, NY, NYC, >CA, etc. the places with the highest local taxes?) Some people choose to >live in these places anyway, for whatever reason, and end up paying more to >their local governments in taxes than people who live more rural areas. HORSE COOKIES! I live in a fringe area in Colorado. By fringe area I mean Denver's suburbs to the east, cows and horses for neighbors to the west. The population density, both for my residential area and for the whole state of Colorado, is by far the lowest of anywhere I have lived (many eastern states, Puerto Rico, and Europe). In direct opposition to the stated assertion that high population density implies high local taxes, this low population density environment is, by a significant margin, the most expensive area I have ever lived in with respect to local taxes (state income tax, sales taxes, etc.). The icing on the cake is that I have never seen the taxpayer receive so little for her/his tax dollar as I see here. Oh, for the good old days of the corrupt but efficient government of Chicago's "da mare" -- Richard J!
ken@turtlevax.UUCP (Ken Turkowski) (06/01/85)
In article <735@mtuxo.UUCP> ped@mtuxo.UUCP (p.davidson) writes: > How does every one feel about Regans idea of disallowing State Taxes > as a deduction? Sounds like double Taxation to Me. Perhaps we should > all write our congressman. Indeed we should! Let's not let this inequity slide through! -- Ken Turkowski @ CADLINC, Menlo Park, CA UUCP: {amd,decwrl,hplabs,nsc,seismo,spar}!turtlevax!ken ARPA: turtlevax!ken@DECWRL.ARPA
ron@brl-tgr.ARPA (Ron Natalie <ron>) (06/01/85)
> > How does every one feel about Regans idea of > disallowing State Taxes as a deduction ? > > Sounds like double Taxation to Me. Perhaps > we should all write our congressman. What ever gave you the idea that double taxation is prohibitted? If it were, I would be deducting the FICA tax, gasoline tax, excise tax, tax on my phone bill, etc... -Ron
andrew@orca.UUCP (Andrew Klossner) (06/01/85)
> How does every one feel about Regans idea of > disallowing State Taxes as a deduction ? > > Sounds like double Taxation to Me. Perhaps > we should all write our congressman. As an analogy, let's say that I market a software product that includes programs written by two other people, and I agree to give a 10% royalty (that's 10% of my income from product sales) to each of the two. Would it be fair to give 10% to the first person, then only 9% (10% of the remainder) to the second? Of course not. Instead of lobbying our congresscritters to add deductions such as this, we should be working to get rid of the deductions still in the package. -=- Andrew Klossner (decvax!tektronix!orca!andrew) [UUCP] (orca!andrew.tektronix@csnet-relay) [ARPA]
fbp@cybvax0.UUCP (Rick Peralta) (06/03/85)
What happened to "CUT SPENDING" !?!? Rick ...!cybvax0!fbp "A likely story. I don't believe a word of it."
lonetto@phri.UUCP (Michael Lonetto) (06/04/85)
> It works like this: Person A, living in NYC, pays high local taxes. > Under current tax laws, they deduct this amount from their gross income, > reducing the amount of federal taxes they pay. The net effect is that their local tax costs them (1 - their marginal tax rate) * (nominal local tax) > instead of the full amount. That difference is money which the federal > government doesn't receive; they know this will happen, and adjust tax rates > so that they get the total amount of money they want anyway. This means, > of course, that federal tax rates must be higher than they would be otherwise > to make up the difference. So all of the farmers in Nebraska, receiving > *none* of the benefits which person A receives for his local taxes, have to > pay higher federal taxes to make up for person A's local-tax deduction. > Those of you who think taxes should be *fair* should like this since > it *is* more fair than the current setup. > Jeff Sonntag > ihnp4!mhuxt!js2j > "It doesn't matter what you wear, > just as long as you are there." - Martha and the Vandellas *** REPLACE THIS LINE WITH YOUR FOOT *** Dear Farmer, Waaal, I s'poses nonayer Nerbrasky farmers gits low intrsrt lones from th' Fed'rl Guvmnt, eh? I s'poses thet nonathem Sunbelt States with allerther Govmint contracts fer miltery and aerospace industries is bein subsidyized, eh? Maybe we'all should jest ask all the poor people to move to Nerbrasky, eh? They're gonna be MIGHTY unhappy here, come tax refr'm. You think the rich people gonna keep on payin them NY taxes if'n they cain't deduct em? NY has always been ofa like mind to Ronnie Raygun -only tax the rich as far as they can deduct it- I don' xpect's gonna change now. Enjoy the corn. Michael Lonetto PHRI NYC (lonetto@phri)
hutch@shark.UUCP (Stephen Hutchison) (06/05/85)
In article <11200@brl-tgr.ARPA> ron@brl-tgr.ARPA (Ron Natalie <ron>) writes: >> >> How does every one feel about Regans idea of >> disallowing State Taxes as a deduction ? >> >> Sounds like double Taxation to Me. Perhaps >> we should all write our congressman. > >What ever gave you the idea that double taxation is prohibitted? > >If it were, I would be deducting the FICA tax, gasoline tax, >excise tax, tax on my phone bill, etc... > >-Ron Double taxation IS prohibited, as far as I know. However, that is NOT what RayGun would be instituting. Double taxation is the practice of applying a tax to monies on which that tax has already been paid. So, for instance, if you had to pay taxes on your tax refund, then those monies would be doubly taxed. If your state taxes your federal refund monies AND doesn't let you deduct your federal taxes from your gross income before figuring state tax, then they are doubly-taxing you. Further discussion of the nature of taxes can be carried on in net.taxes which nobody reads after April 14th anyway. Hutch
brown@nicmad.UUCP (06/05/85)
In article <896@mhuxt.UUCP> js2j@mhuxt.UUCP (sonntag) writes: >> How does every one feel about Regans idea of >> disallowing State Taxes as a deduction ? >> >> Sounds like double Taxation to Me. Perhaps >> we should all write our congressman. > > Seems like one of the best ideas I've *ever* heard come out of Ronnie >Ray-gun. Consider: the marginal cost to a local government of each citizen >is highest when the population density is highest. (else why are NJ, NY, NYC, >CA, etc. the places with the highest local taxes?) Some people choose to >live in these places anyway, for whatever reason, and end up paying more to >their local governments in taxes than people who live more rural areas. They >receive more services from their local governments as a result: better >police protection, fire departments, garbage pickup, etc. > Up till now, the federal government has been forcing people who live in >low-local-tax areas to subsidize the taxes of the people who choose to live >in the high-local-tax areas. Disallowing state taxes as a deduction would >stop this. Do you really think that it was fair for you to force all of the >people in the midwest to help pay your local taxes? I don't. You really shouldn't pick on the midwest. According to our local news broad- casts and words from our own gov, WI is one of the highest states in payment of taxes from its residents. I don't live here because I can deduct those taxes from my federal return, but do you think it is also fair to have Uncle Sam give me back some money (I don't what yet), just so Uncle State can take it away with high taxes? It almost seems to me, until I can get copies of the so-called formulas, that it would be a wash. I don't win or lose. The tax reform is supposed to help me win. I other words, I want the State tax deduction returned to the package. I would love to have Uncle State charge less taxes, then I would have less to deduct, but I would also be paying less. -- |------------| | |-------| o| JVC HRD725U Mr. Video | | | o| |--------------| | | | | | |----| o o o | | |-------| O| |--------------| |------------| VHS Hi-Fi (the only way to go) ({!seismo,!ihnp4}!uwvax!astroatc!nicmad!brown)
robg@mmintl.UUCP (Robert Goldman) (06/05/85)
> Seems like one of the best ideas I've *ever* heard come out of Ronnie >Ray-gun. Consider: the marginal cost to a local government of each citizen >is highest when the population density is highest. (else why are NJ, NY, NYC, >CA, etc. the places with the highest local taxes?) Some people choose to >live in these places anyway, for whatever reason, and end up paying more to >their local governments in taxes than people who live more rural areas. They >receive more services from their local governments as a result: better >police protection, fire departments, garbage pickup, etc. /\ when were you last in NYC? Part of the reason that these places have high taxes is that people from your precious rural areas flee there when they can't find jobs, treatment for mental illness, etc., etc. People in these high population areas are paying to support the `human garbage' generated by areas with lower tax rates. SOMEBODY'S got to feed the poor S.O.B.'s. robert goldman multimate int'l. opinions are mine and mine alone.
arnold@ucsfcgl.UUCP (Ken Arnold%CGL) (06/07/85)
> How does every one feel about Regans idea of > disallowing State Taxes as a deduction ? > Sounds like double Taxation to Me. Perhaps > we should all write our congressman. Of course, if all those state legislators who are complaining about double taxation would just change the STATE law so that you could deduct federal taxes from it, there would be no double taxation! If you want to see how the land REALLY lies, watch your statehouse to see how quickly this gets done... Ken Arnold
slag@charm.UUCP (Peter Rosenthal) (06/07/85)
The only problem with this analysis is that it assumes that all regions get the same share of federal money. New York, for instance supplies much much more money to the federal government in the form of taxes than it gets back in the form of government programs. In principle, if all the federal money benefits all citizens equally, then I would agree that its not fair to choose to live in a place with high local taxes and services and expect to be relieved of some of your federal tax burden. But the fact is that it will be very bad for the country if state taxes can't be deducted. It will be a disaster for education, because there will be tremendous pressures on state and local governments to cut taxes. School taxes are the only taxes that people get to vote on directly. State governments will have to spend more money on college programs to make up for all the cuts in federal student support and grants. Secondary schools will be in direct competition with state colleges for funds that aren't even adequate now. The last thing this country needs is to undermine the educational system any more than it already has.
mmt@dciem.UUCP (Martin Taylor) (06/13/85)
The Canadian approach to Federal and Provincial taxes is to have a
single income tax form to cover both (except in Quebec). You calculate
your Federal tax and then compute your Provincial tax as a proportion
(with some modifications) that depends on which Province you live in.
There's no particular question of double taxation or of subsidy (those
are done by other means, both open and hidden). It seems reasonable
to me that if you are going to have multiple levels of taxing authorities,
they should get together and make it simple for people to deal with
the various taxes together. (Why don't we also do it with municipal
taxes, instead of shifting to the unfair property tax?)
--
Martin Taylor
{allegra,linus,ihnp4,floyd,ubc-vision}!utzoo!dciem!mmt
{uw-beaver,qucis,watmath}!utcsri!dciem!mmttos@psc70.UUCP (Dr.Schlesinger) (06/16/85)
The Rosenthal article re. very bad effect of removing state and
local tax deduction on education budgets sounds logical on the face of
it, and one can hardly argue with its basic thrust... we all want
schools to be supported.
However, the facts are almost opposite. The state and local tax
deduction from federal tax (affecting app. 56% of taxpayers in the
state of New York, acc. to what I read) favors the states where the
spending on education has been highest all along, i.e. like New York,
California, Florida... relatively "progressive" states.
The deduction is widely considered "unfair" in states where the
least is spent on education, e.g. here in New Hampshire. And here's
the rub: New Hampshire, along with the other northern New England
states, still has the old-fashioned town meeting system, where people
vote personally and directly to appropriate the amount of money to be
spent during the year on anything, including their school. They know
and indeed discuss at great length, what impact their votes will have
on the tax rate during the coming fiscal year. They certainly give no
evidence that the deduction affects their decisions... (knowing the
types of business and socioeconomic status of the "folks" one can
fairly well guess that many are now deducting their property taxes...
not because they have such high incomes, but because they are in
situations where they might lose quite a lot by taking the "standard"
deduction.)
Anyway, the main point is not the individual behavior, but that it
in states where people have direct control over their education
expenditures and when, of course, the deduction has been available,
the spending on education has been drastically lower (both in absolute
terms per pupil and in terms of ability to pay, i.e. "tax effort")
than in states where the people have only very indirect control of
this... i.e. by electing more "conservative" school board and
legislature if the previous ones are spending "too much."