I was thinking about this the other day. In my limited knowledge, I cannot think of a single OECD country with an income tax whose tax-free threshold for individuals is higher than the official poverty line. It just struck me as amazing. Think about it. Governments are taxing people who already, by the government's own definition, don't earn enough to achieve an adequate minimum standard of living. Now I'm sure I'm missing something, but I was wondering if anyone thinks this is an acceptable practice, and if so they could explain the rationale for it. I understand the argument that all citizens should be contributing to a government that all use, but surely if we're serious about lifting people out of poverty then governments shouldn't be contributing to the burden. Currently governments are taking money that they themselves admit that the taxpayer literally can't afford.
It's a terribly unfair and intrusive system. Time for a national sales tax with a rebate to replace the income tax.
Income tax is a big deal. But where you have a choice is on where to live in a state and or city that will give you a break on tax. How much can you actually save in your pocket if you moved to Seattle for example rather then live in NYC if you can still make about the same money. My advice if you can make the move then move.
What are you missing? You are leaving Earned Income and Child Tax Credits out of the equation. When you take into account EITC and CTC the income tax threshold is well above the poverty level. The working poor rightfully don't pay income tax and in many cases actually have a "negative income tax" rate. (refund bigger than the taxes paid).
Low tax (read: GOP) states are subsidized by the Federal Government. These people run away from their financial responsibility and depend on handouts from Dem states like CA, NY, CT, etc.
Probably because those people aren't a collection of selfish pricks, but people who are patriotic and believe in their collective role in making the US a great nation.
I'm failing to see the connection you're making between state and federal income tax rates. Its just the typical bullshit "they take all our money" whining.
For example, Alaska has the lowest state/local tax burden in the US at 6.8%. Yet they're subsidized 80 cents per federal tax dollar. The rest of us are paying extra money to go to Alaska while they enjoy extremely low state taxes.
Did you ever think that might have something to with the 81% of the land the federal government owns in Alaska? Why should state taxes go to pay for federally owned/run/funded programs?
Alaska was a bad example. But find out for yourself which states are "welfare states" http://www.nemw.org/taxburd.htm
I've seen these charts, and they mean nothing. They don't take into consideration any federally funded programs that exist in that state. National Parks, national forests, national monuments, military installations, or anything else. None of these things have anything to do with state taxes. Basically, if it pisses you off that much, either elect a senator or congressman who can get you more money (maybe sell off some of your land to the federal government) or move to one of those "welfare state" you speak of.
What they mean is this: the great majority of GOP-stronghold states take more out of the Federal treasury than they put in. They preach small government and lower taxes while sucking on their federally subsidized pacifier. The great majority of Dem-stronghold states put more into the federal treasury than they get out, meaning they're propping up the GOP states. This is no coincidnece. You can see the state/local tax burden by state here: http://money.cnn.com/pf/features/lists/taxesbystate2005/index.html And see which states are guilty of levying low state taxes while milking the big federal tit. Your state, interestingly enough, sucks at the federal tit AND levies high state taxes. You guys love your government programs.
Again though, consider the fact that 60% of the land in the state of Utah is owned by the federal government. So yeah, a little bit of cash comes this way. And a lot of that money is for really fun stuff like storing nuclear waste, chemical weapons, and testing rockets for NASA and really big bombs for the military. Other than the NASA thing, I'm going to say that particular tit we're sucking looks like an eight ball in a tube sock. Like I said, before I judge anything I like to know where that money is going.
I thought that state/local tax burden chart was useful until I looked at the white paper discussion of its methodology here: http://www.taxfoundation.org/files/wp4.pdf BP funds over 50% of the Alaska state budget through severance tax, yet that study re-allocates almost all of that tax to other states. In short, those figures bear only a small relationship to actual tax collections by the states listed. Very, very weird.
And we all know there is nothing run by the federal government in the state of Maryland. Other than: Walter Reed Bethesda NASA NSA ONI DHS EPA FEMA Andrews AFB US Naval Academy NAS Patuxent Aberdeen Fort Detrick Fort Meade Antietam national Battlefield Antietam National Cemetery Appalachian National Scenic Trail Assateague Island National Seashore BW Parkway Catoctin Mountain Park C&O Canal Chesapeake Bay Gateways Clara Barton National Historic Site Fort Foote Park For McHenry Fort Washington GW Parkway Glen Echo Park Greenbelt Park Hampton National Historic Site Harmony Hall Monocacy National Battlefield Oxon Cove Park Piscataway Park Potomac Heritage National Scenic Trail Suitland Parkway Thomos Stone National Historic Site I'm sure I missed a few.............. dozen but I think you get my point. Like I said, look into what all this money is being spent on before you start with the outrage.