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Can someone explain to my why its an advantage to live in a state with zero income tax? Does it really matter how the state makes its money. If it does not co
by mp3tricord 13y ago
Can someone explain to my why its an advantage to live in a state with zero income tax? Does it really matter how the state makes its money. If it does not come from your paycheck directly they get it other ways.
For instance in Florida you pay ~2% property tax on your assessed value and in california you pay ~1% on your purchased value. If you bought property at 500k and its appreciated to 1 million in CA you pay 5k in FL you pay 20k.
- dxhdr 13y agoSure, but consider that the majority of people in SF/SV are priced out of the market and are instead renters -- they're getting the worst of both worlds.
- mp3tricord 13y agoBut the additional property tax is already built into your rent price and increases?
- dxhdr 13y agoThe point is that as a non-homeowner, you don't pay property tax so you don't benefit from low property tax rates. Instead you're paying rent that's among the highest in the nation. And your salary, which better be large to deal with the outrageous rent, is being taxed at one one of the highest rates in the country. It's the absolute worst tax situation to be in.
- wpietri 13y agoGenerally inputs are priced into market price. So as a renter, I suspect I benefit from low property taxes.
- deleted 13y ago[deleted]
- grogenaut 13y agoState sales tax in FLA is %6 currently. Obviously it varies by jurisdiction but thats a pretty good rate for the US. Sales tax == VAT in the EU
- DanBlake 13y agoSan Francisco/CA is 9%
- grogenaut 13y agothe point is you're paying %9 sales tax AAND state income tax. Fla is paying %6 sales tax. Also you have to live in CA. And in SF. Double whammy.
- toomuchtodo 13y agoChicago/Cook County: 10% I don't even get a decent startup scene for that.
- DanBlake 13y agoThe advantage is for high income people, of course. If you make alot of money (or have alot of retirement income coming in) florida kicks ass. As a simple example: If you make 1 million a year and live in a 2 million dollar house. Property tax in Cali : 20k Income tax in Cali : ~65k Property tax in FL : 40k Income tax in FL: Zero So in this example, you are 100% better off being in florida.
- ohazi 13y ago> If you make 1 million a year and live in a 2 million dollar house. > Property tax in Cali : 20k Income tax in Cali : ~65k Only 65k taxes on 1 million in income? In California? I'll pay you to do my taxes.
- GeneralMayhem 13y agoThat's for state tax only - federal would be another good chunk on top of that - but yeah, assuming that's all straight-up income (not investments or anything), just the state-level taxes should be about 100k at California's current rates.
- DanBlake 13y agoYou dont pay state income tax on money you pay to the federal gov. Surprised how few people know that. So on 1m you will pay ~350k to the fed gov- That leaves you with 650k 'net' remaining. CA taxes you on this amount. Hence the 65k for Cali.
- eigenvector 13y agoDo you know a lot of people who earn $1 million/year and live in a $2 million house? A 2:1 home value:income ratio is extremely low.
- r4vik 13y agoI thought USA had low taxes compared to Europe but wtf property taxes
- ars_technician 13y agoYou assume both states ultimately take in the same amount of money, which is false. California just takes more money from its residents. Florida isn't 'hiding it' in other taxes.
- mikeash 13y agoReally? Some quick searching around shows a similar amount of spending per capita.
- ec109685 13y agoYou also can deduct your state taxes on your federal tax return, further lessening that burden.