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what if two higher tax states both claim they are your home state because they want to fight over your taxes. this must happen. that's different than moving 'mo
by Latteland 8y ago
what if two higher tax states both claim they are your home state because they want to fight over your taxes. this must happen. that's different than moving 'mostly' to a lower tax state. and then what's the threshold for ny claiming you moved there? what a mess.
- joering2 8y agoIt happened to my buddy who happens to be millionaire and flies every few weeks cali versus new york. Two years ago state of california sued him for non payment of taxes. It went down to literally receipts from gas station making difference proving he spent over 183 days in new york versus cali. intresting - credit card purchases were not admitted because state tried to prove he used proxy (he does) so he could be in any state when purchasing off of Amazon. He won and gov appealed Then cali went after new york asking for all the evidence of his taxes knowing new york wont comply. For over year both states fight with each other with my friend being literally non-involved. Eventually cali dropped the suit some 16 months after filing appeal.
- everdev 8y agoThis is insane. Why don't we just pay the federal government the entirety of our tax obligation and have them partition it out to the states? I'd love to spend less than half the year in any one state or be completely state-less.
- efnx 8y agoThat sounds dangerous.
- idiocratic 8y agoDangerous in what way? I'm European and baffled by this sentence.
- cylinder 8y agoAmericans are deathly afraid of government. It's not just the lower or extreme classes. As you can see it's pervasive even on HN. The irony is that Europe, Australia etc are much less "dangerous" than the US
- oblio 8y agoWe have a different mindset and tend to see the state as a big, albeit slow and annoying, institution that's meant to work for us (minus corruption). See Rousseau's "social contract". From what I've noticed Americans tend to lean more towards "state = bad; state = tyranny". There is a certain irony, seeing that bar outright dictatorships (China), the US state is and has been the strongest one for over half a century...
- 8y ago
- labster 8y agoThe whole point of a federal government is to decentralize authority. If the taxation power rests with a single authority in the United States, then federalism would be dead and the central government would have all the power. It's not necessarily wrong (though I believe it would be a bad idea), but this is one of those questions where the answer to "Why can't the world be simple?" is "Because the world is complex."
- cylinder 8y agoWorks pretty well in Australia.
- meddlepal 8y agoJust because it works in Australia doesn't mean it would work in the US. Different people, different culture.
- labster 8y agoOK, I'll bite. Australia has a population of ~25 million, similar to Texas. So let's work with something of a similar scale to the U.S.: Would you be okay with having all of Australia's taxes being collected by the Commonwealth, and then getting your portion that way?
- tzs 8y agoThe population is pretty much irrelevant to scaling for this problem. The relevant parameter is the number of political subdivisions that the national entity would be distributing taxes to, which would be ~50 in the US and ~6 in Australia.
- tzs 8y ago...to elaborate, population is irrelevant because the national government is going to collect taxes nationwide for itself regardless of whether or not collecting taxes for the states is added to its duties. The "this problem" that we are talking about here is the problem of the national government handling state taxes in addition to national taxes. For this problem the national government is dealing with states, not individuals, and so it is the number of states that it has to deal with that is the main factor affecting complexity and scaling.
- ajdlinux 8y agoThat's the Australian approach, where the federal government collects all income taxes (courtesy of some interesting legal maneuvering in WW2) as well as sales taxes, leaving the states only able to collect payroll taxes, land taxes, mining royalties and a few other limited types of revenue. All sales tax revenue is 100% distributed back to the states - but it's done under a principle of "horizontal fiscal equalisation" (https://www.cgc.gov.au/index.php?option=com_content&view=article&id=258&Itemid=536 https://www.cgc.gov.au/index.php?option=com_content&view=art...) which means that richer states subsidise poorer states. Income tax is used to cover federal expenditure but also pays for a lot of federal grant money which is paid to the states. In general, the Australian approach to federalism is a lot more federal-heavy than in the US, and some part of that is driven by how the feds have completely taken over most forms of taxation and thus control all the purse strings.
- BigJono 8y agoShouldn't the fiscal equalisation strategy result in better infrastructure and more incentives for businesses and people to move to smaller states? It seems like the market is focused entirely on Sydney and Melbourne, and it's orders of magnitude more difficult to find a good job elsewhere.
- ajdlinux 8y agoI imagine the answer to that is that it does result in better infrastructure and more incentives to move to smaller states, and if we didn't base our tax policy around HFE then it would be even worse than it is now.
- consp 8y agoWhile not a federation or federally instituted, this is exactly how it works in the Netherlands. The central government collects income tax, VAT and social security taxes, etc. The local government (e.g. municipalities mostly, provinces sometimes) get grants and spend it. Example: Healthcare is locally instituted by the municipalities/cities ("gemeenten") while the tax (social securities) are collected nation wide together with income tax. Please note that only the executive part is local. The municipalities can also levy taxes but usually only on common goods like sewage, water and on home ownership or equivalent for people who rent. The provinces do the same but it is far less than the central government does.
- toomanybeersies 8y agoThat's what's done in Australia. I'm not sure of the specifics of how the tax money is doled out, but all my income tax and sales tax goes to the federal government, which then divvies it out to the states. There are additional taxes in some states though, which are collected by the states, such as payroll tax, but I don't see that on my payslip.
- keithpeter 8y agoUK: local authorities charge a property tax based on the value of homes determined some time ago. The amount raised is insufficient to cover costs so central government provide a 'revenue support grant' to each of the local authorities in the UK country in question. That money comes from income tax which is paid to the central government in the UK. The formula used to calculate the level of revenue support changes, some would say that the changes are politically based. My feeling is that, given the robust politics that appears to exist in the US, coupled with what again appears to be frequent recourse to litigation between levels of government, you don't want to go down that route.
- isostatic 8y agoNow that Scotland can collect income tax separately, I wonder if we'll start seeing similar anomalies.
- raverbashing 8y agoThis is how it works pretty much everywhere, state taxes are only for specific things (not income tax). Or at least the states should have a double taxation treaty (but of course that would make sense so it's not going to be implemented)
- boobsbr 8y agoIt's the approach in Brazil, and it does not work out. States heavily depend on the Federal Government and have to constantly plead for funds. It's a mess, and I guess taking into account the size the of the US, the higher number of states, and a huge difference in their wealth/GDP, the situation will likely repeat itself.
- taejo 8y agoThere are anyway US states that are dependent on federal funds: the transfers are just sneakier and less efficient than in places where this is a constitutionally recognized process.
- patrickmay 8y ago> Why don't we just pay the federal government the entirety of our tax obligation and have them partition it out to the states? That would give far too much power to a federal government that already far exceeds its constitutional mandate. I suggest the inverse: The federal government should get its funding only from the states. Each state can decide how much to contribute and how to raise the money. That would decentralize power significantly.
- s73v3r_ 8y agoThe Articles of Confederation want their failed idea back.
- patrickmay 8y agoIt was only a failure if you think a strong federal government is a good idea. I offer the current situation as evidence against that.
- s73v3r_ 8y agoOr a failure if you want a functioning government. There's a reason the Articles were thrown out, and the inability of the Federal government to raise revenue so it could actually do stuff was one of the major reasons.
- dragonwriter 8y ago> It was only a failure if you think a strong federal government is a good idea. No, a stronger federal government was a solution that was proposed (and adopted) for it's manifest failure. It wasn't the idea that a strong federal government was good that led to the belief the Articles had failed, but exactly the reverse.
- s73v3r_ 8y agoDo you want the Trump administration to be the arbiter of what states are able to spend their revenues on?
- everdev 8y agoI wouldn't want it changing every election cycle, so I'd say it should be some combination of population or area. If states want more revenue than that, they they can add other consumption taxes like bridge tolls, sales tax, etc. that is collected at PoS. I just don't like having a complex math problem to do every year.
- isostatic 8y ago> proving he spent over 183 days in new york versus cali What happens if you spend 73 days in each of 5 states? (OK the 183 day rule in NY specific). Do you have to pick a state to live in for tax purposes?
- gamblor956 8y agoGenerally the state where you own a home or else are registered to vote.
- Latteland 8y agoSo what if you have apartments in 3 states, 2 with high taxes, one with none, and 365/3 = 121 2/3. Pick a low tax state that has nice weather in the winter, say Florida. So 123 days in florida, 121 days in NY, 121 days in cali. Then you owe no tax. If you really wanted to screw things up you could pick a 4th state say the us virgin islands just for bureaucratic fun.
- lemonghost 8y agoThis happens all of the time. For example, it is very common to live in NJ and work NYC. In that case, you pay NYC tax, NY and NJ tax and receive credit for your NJ tax based on the NY state tax you pay.
- o_nate 8y agoThe NYC commuter tax was repealed in 1999. You still have to pay NY state tax obviously.
- lemonghost 8y agoYou're right. Maybe I was confusing it with the Metropolitan Commuter tax.