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I was in fact thinking of that idea that "high tax states also pay for literally all the other states", and I pointed out a flaw in that argument. They are unde

by burfog 7y ago

I was in fact thinking of that idea that "high tax states also pay for literally all the other states", and I pointed out a flaw in that argument. They are underpaying their federal taxes. The voters in those states also happen to be the ones voting for expensive government programs, so it is only fair that they pay. There is no double taxation. You owe tax first to the federal government. The state could let you deduct federal taxes from your state taxes, or not. The federal government has no duty to give you a discount for your choice to live in a place that would divert lots of your income to local purposes. As a thought experiment, consider the ultimate extreme. The local government takes 100% in taxes, then provides you with everything (house, food, clothes, etc.) as government services. Your region thus pays ZERO federal income tax despite having wealth to enjoy (you are fed, etc.) and receiving federal funds for various things. What you have is a partial version of that extreme. Your state isn't being 100% unfair to the other states. It is just modestly unfair. The federal government shouldn't enable that kind of unfairness. BTW, politifact is not credible due to strong partisan bias. I also don't think that "transfer payments" are a proper accounting for differences.

arcticbull 7y ago
How is it fair that my taxes paid to the state of California, a US state, are much less deductible than my taxes paid to foreign governments? No cap on those. The idea is that taxes paid are not really income but rather my cost of doing business, nothing to do with who gets them. It’s like an expense for a business. No matter how high or who they go to they’re not taxed; they’re deducted against income. California takes that tax revenue and reinvests it into the populace which is what generates the income the federal government relies on in the first place. Think of state tax revenue as COGS. The federal government has always been second behind the states and been severely limited in scope and responsibilities. You know what if a state had 100% tax, they could decide between themselves and the federal government how that would be used to service national obligations without involving me. Further it is patently double taxation if I have to pay taxes to two entities based on the same unadjusted income. Fair or unfair (in your opinion or mine) it is what it is: double taxation.
- burfog 7y ago
  Consider the people of California as a group, not as individuals, seen from the federal perspective. They should not be able to evade federal taxes by spending the money on themselves. Double taxation and beyond is the norm. You have sales tax, paid to a vendor that pays their own income tax, for goods that were imported with tariffs. Unless you voted against the California politicians, you should enjoy paying your taxes. Those politicians are why we can't cut expensive government programs at both the state and federal level, and why we must tax heavily to compensate.
  - arcticbull 7y ago
    > Consider the people of California as a group, not as individuals, seen from the federal perspective. They should not be able to evade federal taxes by spending the money on themselves. Nobody's evading anything. The federal, state and local governments together are your government. That's why you've always been able to deduct the local from your state and federal, and state from your federal. In fact I can't think of a country where that's not true, can you? > Double taxation and beyond is the norm. You have sales tax, paid to a vendor that pays their own income tax, for goods that were imported with tariffs. Not with income taxes. Historically not within the United States, and again, as you continue to refuse to address, not for taxes paid to foreign governments. The US has a huge network of no-double-taxation tax treaties with foreign governments because it's not fair to tax people on their taxes. The IRS has a no-double-taxation treaty with Azerbaijan and yet it can't manage to sustain one with California? [1] > Unless you voted against the California politicians, you should enjoy paying your taxes. Those politicians are why we can't cut expensive government programs at both the state and federal level, and why we must tax heavily to compensate. California's top tier is 13.3%, the US federal is 37% + FICA. You can't tell me with a straight face that California's measly tax rate is the reason the US federal government has to charge 40% of both my income and my taxes. I have no problem paying my fair share. I'm also a non-citizen so I can't vote. [1] https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z https://www.irs.gov/businesses/international-businesses/unit...
    - 7y ago

by burfog 7y ago

arcticbull 7y ago

How is it fair that my taxes paid to the state of California, a US state, are much less deductible than my taxes paid to foreign governments? No cap on those. The idea is that taxes paid are not really income but rather my cost of doing business, nothing to do with who gets them. It’s like an expense for a business. No matter how high or who they go to they’re not taxed; they’re deducted against income. California takes that tax revenue and reinvests it into the populace which is what generates the income the federal government relies on in the first place. Think of state tax revenue as COGS. The federal government has always been second behind the states and been severely limited in scope and responsibilities. You know what if a state had 100% tax, they could decide between themselves and the federal government how that would be used to service national obligations without involving me. Further it is patently double taxation if I have to pay taxes to two entities based on the same unadjusted income. Fair or unfair (in your opinion or mine) it is what it is: double taxation.

burfog 7y ago
Consider the people of California as a group, not as individuals, seen from the federal perspective. They should not be able to evade federal taxes by spending the money on themselves. Double taxation and beyond is the norm. You have sales tax, paid to a vendor that pays their own income tax, for goods that were imported with tariffs. Unless you voted against the California politicians, you should enjoy paying your taxes. Those politicians are why we can't cut expensive government programs at both the state and federal level, and why we must tax heavily to compensate.
- arcticbull 7y ago
  > Consider the people of California as a group, not as individuals, seen from the federal perspective. They should not be able to evade federal taxes by spending the money on themselves. Nobody's evading anything. The federal, state and local governments together are your government. That's why you've always been able to deduct the local from your state and federal, and state from your federal. In fact I can't think of a country where that's not true, can you? > Double taxation and beyond is the norm. You have sales tax, paid to a vendor that pays their own income tax, for goods that were imported with tariffs. Not with income taxes. Historically not within the United States, and again, as you continue to refuse to address, not for taxes paid to foreign governments. The US has a huge network of no-double-taxation tax treaties with foreign governments because it's not fair to tax people on their taxes. The IRS has a no-double-taxation treaty with Azerbaijan and yet it can't manage to sustain one with California? [1] > Unless you voted against the California politicians, you should enjoy paying your taxes. Those politicians are why we can't cut expensive government programs at both the state and federal level, and why we must tax heavily to compensate. California's top tier is 13.3%, the US federal is 37% + FICA. You can't tell me with a straight face that California's measly tax rate is the reason the US federal government has to charge 40% of both my income and my taxes. I have no problem paying my fair share. I'm also a non-citizen so I can't vote. [1] https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z https://www.irs.gov/businesses/international-businesses/unit...
  - 7y ago