Skip to comments.Is a state with no income tax better or worse?
Posted on 01/17/2020 7:17:12 AM PST by ConservativeMind
Is it better to live in a state with no income tax? Its a great question considering we already have to set aside a portion of our paychecks for the federal government.
The case for removing an individual income tax typically goes like this: states that dont dip directly into their residents pay become beacons for growth. Theyre better at creating jobs and keeping a core of young, educated workers from moving to other states.
The American Legislative Exchange Council reports that over the past decade the nine states without a personal income tax have consistently outperformed on GDP growth, employment growth and in-state migration the nine states with the highest taxes on personal income.
The taxation debate is largely ideological. Those with larger paychecks might see the cons of taxing personal income. On the flip side, those who want governments to help shape society and support funding that initiative might favor an income tax. Before taking a side, however, consider these factors.
While the jurys still out on the benefits of living in a state with no income tax, experts agree that there is one clear result for those states that do levy an income tax.
It helps the poor.
An income tax is a classic tool for redistributing wealth. Its usually progressive in nature, meaning that it taxes higher earners at a greater rate than lower earners. Other taxes typically dont have that Robin Hood-like characteristic.
Its extremely difficult to fund government adequately and sustainably when families with the largest incomes are contributing the least, says Carl Davis, research director at the Institute on Taxation and Economic Policy in a statement.
(Excerpt) Read more at bankrate.com ...
Yes, especially if one is making Roth Conversions before the 'Rats get in charge of US tax rates again.
My state has:
Low income tax
Low property tax
NO sales tax
I prefer no sales tax...
Sooner or later dhims will flood the state to fix all that
The errors are in the assumptions
Helping the poor is best achieved at a local level
The Moral Corrosiveness of treating the poor as a herd of cattle to be
fed and watered is profoundly harming the black community, among other things
The percentage of children born to single parent households is horrific
Government does not, and can not, Love, Care, or Give a Damn
Any group of individuals larger than about 150 (Dunbars Number)
ceases to be able to care about each other, as individuals
Love of Thy Neighbor as Thyself atrophies,
Our Vision of the Second Great Command Dies
The people cared for by Government are treated like livestock
Caring in society is best achieved by the smallest groups possible,
Families are the prototype, Churches are an excellent example.
Mont. has sales taxes in "Resort" areas.
I paid $3k+ in California taxes after the feds got theirs. If I move to Florida I save it but it will end up somewhere in Fla. Either sales or property.
Where you at?
it’s not NY,NJ,IL or CA.
Texas has no state income tax. But its property taxes are very high. If states don’t get the revenue one way, they get it another. Which is better? I have no clue. Other factors may be more important. But property taxes aren’t tied to income, while income taxes are.
I think liking other lifestyle-related things are more important than taxes, but that’s just me.
Honestly, from this guy’s tax perspective, I’m sure it’s a benefit to the people that live there, but unless you’re really a high wage earner, I think it’s closer to a wash than most people realize.
Why? Most states without an income tax typically have a more aggressive structure in place for sales taxes. Texas is the perfect example where there are State, County, City, Transit and Special District sales taxes galore. Yes, these are a function of what you spend. However, the average person is spending a higher percentage of their income on things than a wealthier person would. And the wealthier person can more easily afford the taxes.
The climate of a state plays a big role too. Here in the northeast the weather can be brutal on roads, bridges, airports etc... In a place where it rarely snows or ices, there is no need to fund that equipment. No need for ice melter, sand, salt, or the labor to move it. No need to repair roads constantly from the salting, freezing, cracking, expanding, plowing... it all takes a toll. Larger populations mean large Police Force, Fire Brigades, 911 infrastructure. Larger schools. It’s all related.
That said, most professional athletes have residency in TX or FL. And the reason is simple - no tax! Which goes to my point about the very wealthy being helped the most.
Moved to Florida from PA for that very reason. I save 4.5% in state and local taxes and the property taxes are equal. The sales tax is one percent higher but at my income level I’m still ahead nearly $10K. Plus Pa getting snow this weekend and I’m in shorts!
My state (MA) has high everything. I pay over $10,000 a year for property tax. I try to shop in NH which has no sales tax.
As my elementary school teacher used to say, "Hiding between the 'A' and the 'T'"................
One thing is certain - by hook or by crook the left is determined to separate you from your cash...
(My way of saying that living in a state with no state income tax does not preclude them from “liberally” fleecing us)
Every state collects revenue one way or another. Some more than others.
If it is an income tax, you generally only pay it when you are earning money.
Otherwise, as in Texas, it is a property tax that you pay whether you are working or not. You can sell but not quickly to reduce the tax but it still goes on whether you are earning money or not.
I’ve lived in both types of regimes. Property tax in lieu of income tax is manageable by choice but goes up unmercifully no matter your economic condition.
One thing I believe ALL states try to do is to hide their per-capita revenue or to benchmark against any other state. Their only answer to any problem is that they need more revenue no matter how corrupt, inefficient or wasteful they are.
You’ve made an error in your assumption.
I read the whole article. It compared individual no tax states. Still the author is in favor of the income tax suggesting the rich don’t pay their fair share. Crap. The income tax is 100 years old. It’s the cause of all our present day problems. Granted higher income earners spend a lower percentage of their incomes on necessities but whose business is that?
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