The Rich Pay State and Local Taxes at Half the Rate the Rest of Us Do

[charles d]

Source: AlterNet

February 20, 2015

Roads are crumbling, bridges require repairs, schools need upgrades and public pension systems remain underfunded. How can states and cities find the money to address any of these problems? One way could be through their tax codes.

According to a new report, if the rich paid the same state and local tax rate as the middle class, states and cities would have hundreds of billions of dollars more a year in public revenue.

Last month, the nonpartisan Institute on Taxation and Economic Policy found that the poorest 20 percent of households pay on average more than twice the effective state and local tax rate (10.9 percent) as the richest 1 percent of taxpayers (5.4 percent).

That preceded the new report from the left-leaning groups Good Jobs First and the Keystone Research Center which finds that if tax laws were changed to compel the highest income earners to pay the same rate as everyone else, states and localities would rake in up to $128 billion a year in new revenue. If just the top 1 percent of earners were compelled to pay the typical middle-class tax rate, the report says the change would raise more than $68 billion in new annual revenues.

Read more: http://www.alternet.org/economy/filthy-dirty-rotten-stinking-hotel-fines-couple-leaving-bad-review

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But, but the rich are too busy creating jobs!

[Major Nikon]

1. As if federal taxes weren't bad enough, state taxes are the most regressive

[guillaumeb]

2. here in Illinois

Governor Bruce Rauner, aka Baron von Carhart, just took office in January as the state income tax was reduced. Our state has a flat tax, which benefits the rich of course. To reduce the deficit that the income tax reduction will cause, the governor is proposing to increase the sales tax, which falls most heavily on the bottom 90%.

By the way, the income tax reduction will give the governor a nice little $750,000 yearly tax reduction on his $60 million a year retirement money.

Hope he uses his 3/4 million reduction to hire some maids and a gardener so he too can be called a job creator.

[KansDem]

3. "...the rich are too busy creating jobs!"

Yeah, in China, India, and other places around the world. Anywhere the workers will work for less than Americans!

After all, when Reaganomists touted that "trickle down" would create more jobs, they didn't way where!

[Dont call me Shirley]

4. Welcome charles d. Thanks for the post.

[valerief]

6. The rich pay taxes? I thought they paid for politicians so they wouldn't have to

pay taxes.

[randys1]

7. And people in the $100K - $300K range, who make all theirs as payroll vs capital gains

are carrying a much higher burden than their richer counterparts.

About a 20-23% effective tax rate on taxable income of $175,000 - $300,000 for instance...

And that is just Federal, add your state tax to that.


Now, I am not saying we need to shed any tears for these people, but it is unfair that someone making $225,000 a year pays 22% and someone like Romney making $20,000,000 pays 15% (capital gains rate)

They system is skewed to the wealthy, it should be the opposite

[progree]

16. Thanks to Obama, the top capital gains tax rate was raised from 15% to 23.8%

Something Obama seems to never gets credit for here.

First the nominal capital gains rate on the top tax bracket (those earning about $406,750 Single / $457,600 married in taxable income in 2014) was raised from the 15% Bush era back to the 20% Clinton era rate, thanks to the The American Taxpayer Relief Act of 2012. http://www.irs.gov/taxtopics/tc409.html

Additionally, to help pay for the Affordable Care Act, a "Net Investment Income Tax (NIIT)" 3.8% surcharge was added to: the lesser of: net investment income, or Modified Adjusted Gross Income amounts that exceed $200,000 Single / $250,000 Married Filing Jointly. It’s a bit confusing, but on studying, it clearly applies to people making several hundred thousand dollars or more in capital gains, even if they have no ordinary income. FFI: http://www.irs.gov/uac/Newsroom/Net-Investment-Income-Tax-FAQs

So someone earning a half million or so and more will pay a 20% + 3.8% = 23.8% effective rate on capital gains.

Still not fair to singles above $36,900 in taxable income (equivalent to $47,050 in adjusted gross income for someone who doesn't itemize deductions), or marrieds filing jointly above $73,800 in taxable income (equivalent to $94,100 in adjusted gross income for non-itemizers) who pay a 25% or above marginal rates (33% for single taxable incomes of above $186,350, and 39.6% for those above $406,750). (These are 2014 income thresholds. They are indexed to inflation).

[blkmusclmachine]

8. NO WAY the TRTT (Too Rich To Tax) pay 50%. NO WAY!

Uh uh. Nope.

[cstanleytech]

9. I dont have a problem with the rich paying a lower tax

if the rich actually did provide good paying jobs for the majority of us but the fact is they dont, instead what they do is just invest in stocks to grow their wealth after they hire the limited number of household staff they need which does jack shit for the majority of people.

[christx30]

15. They do create jobs.

For 12 year olds in Honduras. Or suicidal people in China.

[progressoid]

10. Here's the report:

http://www.itep.org/whopays/

Use the interactive map to see how your state fares.

[Trillo]

20. Averages for all states

From your link,

[central scrutinizer]

11. Even more regressive yet are fees

Our local county commission, infested with Tea Partiers, has come up with a plan to raise money for road repair by adding a county $35/year/vehicle licensing fee. The effect on a family earning $20,000 is five times greater than the effect on a family earning $100,000. Of course someone who is not living paycheck to paycheck won't see what the problem is since $35 is chump change (to them).

[progree]

18. In Minnesota: ever-growing fees per household. And special taxes of fuel-efficient cars!

e.g. to pay for road construction, a fee of $48/household/year was added to our utility bills ($2/mo to our electric bill and $2/mo to our gas bills -- see how sneaky those f*ckers are in trying to make it seem insignificant by dishing it up in small bites). And as you point out, that's even more regressive than a sales tax. It's essentially a head tax.

And now some totally insane clown (and sadly a Democrat) is proposing taxing highly fuel-efficient cars -- the more fuel-efficient, the higher the tax. That's because this literal asshat thinks these cars don't pay their fair share of the gasoline tax.

ST. PAUL, Minn. (KMSP) -
A bill introduced in the Minnesota Legislature would increase tab fees for high-mileage cars ((better wording: high-mileage per gallon cars, i.e. more fuel-efficient cars)), including hybrids. Rep. Ron Erhardt (DFL-Edina) has introduced this bill to attempt to recoup some of the lost gas tax revenue from cars now getting better gas mileage.

Here's the proposed fee schedule:
35-40 mpg = $35
41-45 mpg = $55
46-50 mpg = $65
51-55 mpg = $75
56-60 mpg = $85
61 mpg + = $95

http://www.myfoxtwincities.com/story/28139099/minnesota-rep-wants-to-increase-fees-for-high-mileage-cars

So you are f**k'd if you try to conserve and save the goddam planet from being fried.

I wrote both of my legislators. I will write this clown too, even though i'm not his constituent.

[Cryptoad]

13. Even Jesus talked about

the true monetary valve is in relation to one's overall wealth. If the GOP wont believe Jesus who will they believe?

Mark 12:41-44
Then Jesus sat down opposite the Temple almsbox and watched the people putting their money into it. A great many rich people put in large sums. Then a poor widow came up and dropped in two little coins, worth together about a halfpenny. Jesus called his disciples to his side and said to them, “Believe me, this poor widow has put in more than all the others. For they have all put in what they can easily afford, but she in her poverty who needs so much, has given away everything, her whole living!”

[hughee99]

14. Wow, in the rather blue Washington state, the poorest pay 16.8% of their income in taxes

while the top 1% only pay 2.4 percent. Meanwhile, in the the very red Utah the poorest pay 8.6% while the wealthiest 1% pay 4.8%. I would expect Washington to have a more progressive tax rate than Utah?

[Arwinnick]

19. Here in Talibama

the rich pay 0.00% taxes.as long as they own mines,timberland ,unused farm tracts.The sharia laws and jim crow amendments inacted in the 1901 constitution make sure the poor($50,000 or less earnings) pay 83% of all taxes collected in Talibama. Ayattolla Moore with Iman Bentley make sure it will remain the same. Sheik Sessions conspires with Sheik Byrnes to make sure sharia laws happens in DC also.