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Raising state income tax to 10% is not enough to exceed what I pay in sales tax in my state, so such a move would be a net positive for me. If I were a million

Raising state income tax to 10% is not enough to exceed what I pay in sales tax in my state, so such a move would be a net positive for me. If I were a millionaire, it would be a very different story, and I would end up paying more in taxes. But if I were that rich, a relatively small change in my tax burden wouldn't have any real impact on my lifestyle, so who cares? I think sales taxes are generally regressive. They disproportionately impact the poor and middle class, who spend a greater percentage of their income on taxable goods and services than the wealthy.

hellojesus 3y ago
I'm solidly middle class, and the 10% burden is really painful. Remember that is also counts against the $10k salt deduction federally. As it is, I pay well over the salt threshold in income alone, making all property tax unwriteoffable. The other thing income tax disallows is tax avoidance through nonconsumption. I have to pay it all regardless of how much I consume, which I try to keep low. It also means that my adjusted wages per hour are lower. Spent 70 hours a week on a pressing project? Congrats, you don't get paid OT so not only is your hourly wage lower, but your taxes per hour are disproportionately higher.
- babypuncher 3y ago
  10% appears to be the tax rate for the upper classes. I make $110,000/year and my tax rate would only be 7%, barely up from the 5% I pay in my current state. But I end up paying 8.5% sales tax on just about everything I buy, so at worst it's a wash.
  - hellojesus 3y ago
    Bracket (Single)/(Couple) | Marginal Tax Rate $0+/$0+ | 5.00% $3,550+/$7,100+ | 7.00% $8,900+/$17,800+ | 9.00% $125,000+/$250,000+ | 9.90% The marginal rate is 9% starting at your dollars above $8,900 single or $17,800 married. Yes, I rounded to 10% in my statements. Even low income earners relative to the median are taxed astronomically in Oregon. It is simply not a progressive policy. It is a painful policy at best.
ilikehurdles 3y ago
That’s unbelievable to me. If you make around 75000 as a single filer, you’d send about 5800 in income tax in Oregon. Let’s assume we’d have a wildly high sales tax of 10% instead of an income tax: you’d end up having to spend literally all of your take-home earnings on taxable purchases. In other words spending nothing on groceries, rent, or other bills. Just shopping. Oregon has the highest effective income tax for people earning $75k[1]. [1]: https://www.cnbc.com/2023/02/27/states-with-highest-income-taxes-for-people-earning-75000-dollars.html https://www.cnbc.com/2023/02/27/states-with-highest-income-t...

hellojesus 3y ago

I'm solidly middle class, and the 10% burden is really painful. Remember that is also counts against the $10k salt deduction federally. As it is, I pay well over the salt threshold in income alone, making all property tax unwriteoffable. The other thing income tax disallows is tax avoidance through nonconsumption. I have to pay it all regardless of how much I consume, which I try to keep low. It also means that my adjusted wages per hour are lower. Spent 70 hours a week on a pressing project? Congrats, you don't get paid OT so not only is your hourly wage lower, but your taxes per hour are disproportionately higher.

babypuncher 3y ago
10% appears to be the tax rate for the upper classes. I make $110,000/year and my tax rate would only be 7%, barely up from the 5% I pay in my current state. But I end up paying 8.5% sales tax on just about everything I buy, so at worst it's a wash.
- hellojesus 3y ago
  Bracket (Single)/(Couple) | Marginal Tax Rate $0+/$0+ | 5.00% $3,550+/$7,100+ | 7.00% $8,900+/$17,800+ | 9.00% $125,000+/$250,000+ | 9.90% The marginal rate is 9% starting at your dollars above $8,900 single or $17,800 married. Yes, I rounded to 10% in my statements. Even low income earners relative to the median are taxed astronomically in Oregon. It is simply not a progressive policy. It is a painful policy at best.

ilikehurdles 3y ago

That’s unbelievable to me. If you make around 75000 as a single filer, you’d send about 5800 in income tax in Oregon. Let’s assume we’d have a wildly high sales tax of 10% instead of an income tax: you’d end up having to spend literally all of your take-home earnings on taxable purchases. In other words spending nothing on groceries, rent, or other bills. Just shopping. Oregon has the highest effective income tax for people earning $75k[1]. [1]: https://www.cnbc.com/2023/02/27/states-with-highest-income-taxes-for-people-earning-75000-dollars.html https://www.cnbc.com/2023/02/27/states-with-highest-income-t...