Tweaking taxes

Washington can take a lesson from forward-thinking states

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Despite the impressions you may be getting from an increasingly powerful and autocratic Washington, this is still a union of 50 states.

Happily, that allows the various states to experiment with policy, particularly with regard to taxes.

So, while Washington continues its unprecedented borrowing and spending spree without signs of slowing, governors and legislatures are still free to find their own way.

A couple of governors, for instance – in Louisiana and Nebraska – have called for ending their states’ income taxes. And in many other ways, states are looking for ways to attract more business and economic development.

It’s notable that they’re not doing it by spending or taxing more, as is Washington’s way, but by eyeing strategic tax cuts and other incentives.

Washington could learn a lesson from them, if it wasn’t so busy trying to run our lives and telling us how things are going to be.

Already, seven states have no income tax: Texas, Florida, Washington, Alaska, Nevada, South Dakota and Wyoming.

As Reuters news agency notes, the freedom of 50 states to chart their own destinies allows them “to test long-debated tax ideas.”

In fact, Washington is about the only place where innovation and reform aren’t being seriously discussed. That’s not just a sad state of affairs, but it also likely puts a drag on the national economy.

“When it comes to getting pro-growth tax reform done this year, the only real opportunities are at the state level,” Reuters quoted Patrick Gleason, director of state affairs for Americans for Tax Reform.

Liberals worry that such tax changes may hurt the lower and middle classes. If so, states will have to adjust accordingly. More likely, however, is a scenario in which certain states grow economically faster than others, rising the tide for all boats.

A more realistic concern is that less forward-thinking states will continue on their current path – which includes public pensions and benefits that may ultimately consume their budgets – and that they will someday go to Washington for bailouts. That would mean that more responsible, well-managed states would be asked to subsidize the errors and lack of vision of other states.

Taking money from one state’s taxpayers and giving it to another’s – isn’t that taxation without representation?

That should not be allowed to happen. If we could wave a wand to make Washington more functional – well, first we’d have them balance the budget and stop regulating us to death. And we’d have congressmen go home after a couple terms. But then we’d have them pass a law saying no states can be forced to bail out other states for having created their own messes.

States are competing in the marketplace of ideas.

Let them.

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Rhetor
1025
Points
Rhetor 01/21/13 - 08:00 am
1
8
Tweak?

The ideas of some conservative state leaders entail getting rid of the income tax, which is moderately progressive, and replacing it with a sales tax, which places most of the burden on ordinary working people while giving a pass the rich. The reason is that most of the things that ordinary people spend money on are subject to sales taxes, while the rich people's investments are not. Same old, same old.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 08:24 am
7
2
Rich people don't buy
Unpublished

Rich people don't buy consumables?....Do they eat their "investments?" What are these things that ordinary people buy and pay tax on that rich people don't? The idea that a sales tax burdens the working people more than the rich is completely unfounded...especially when you look at all the "prebates" that are proposed.

Techfan
6461
Points
Techfan 01/21/13 - 08:58 am
4
7
"Taking money from one

"Taking money from one state’s taxpayers and giving it to another’s – isn’t that taxation without representation?"

Maybe the crack editorial staff should have done a little research an listed which states are "donor" states, and which states are "receiver" states. Of course that would give the readers real information instead of just quote from Grover Norquist's group who refuses any tax increases, even in war or disaster, and is one of the major factors in the deficit/debt situation we have today. Norquist freely admits his view of government is to "shrink it down to the size where we can drown it in the bathtub" (or to the size it will fit in a uterus for the current GOP). He's held the GOP hostage to his "taxpayer" pledge to the detriment of the nation. You don't get to just start a couple of wars that cost billions without raising additional revenue. Or at least we didn't do it in the past. The GOP is walking lockstep with a man so immature that he said Obama won because he made it sound like, "Romney was a poopy-head". This is the guy with a stranglehold on the Republican Party? He's in some sort of arrested development and acts like nothing a spoiled teenager (well, maybe a 12 year old) who, if he doesn't get his way, takes his ball and goes home then plots how to get revenge.

BTW: States with no income tax. Alaska-oil (also receives the most federal money per capita), Texas-oil, Nevada-gambing, Florida-tourism, Washington-business and occupation tax on gross receipts (0.138% to 1.9%), Wyoming-severance tax(removal of natural resources) and mineral royalty taxes(revenue earned from selling minerals), South Dakota-actually has lower taxes but taxes some odd things like snow removal, and has a 2% contactor fee on all construction (even churches have to pay this one).

We can't leave out our state (Ga., sorry SC). The state has been solidly in the hands of the GOP since 2002. We now have sales taxes that are comparable to states with no income tax. 8% in some areas. We also have a highly regressive income tax structure where the top rate kicks in at $7001 and that start after ZERO income. Technically, if you make $1.00 for the year, you owe the state 1 cent. This is pretty freakin' ridiculous. The Ga. legislators are too busy devising tax breaks for all of the lobbyists that roam the halls as well as other perks. Only 70+ lobbyists to make sure we get to pay for Plant Vogtle for 15+ years without receiving one kilowatt of power. Maybe the auto dealers can lobby and get us to start paying for a car we'll get 15 years from now?

Humble Angela
41338
Points
Humble Angela 01/21/13 - 09:13 am
5
4
Comparing state income tax
Unpublished

Comparing state income tax with federal income tax is like comparing apples with oranges.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 09:17 am
5
4
"Technically, if you make
Unpublished

"Technically, if you make $1.00 for the year, you owe the state 1 cent. This is pretty freakin' ridiculous. "

Yeah...you certianly wouldn't want those who receive the most in "entitlements" to actually have to chip in.

dichotomy
34433
Points
dichotomy 01/21/13 - 09:38 am
7
1
If sales taxes hurt poor

If sales taxes hurt poor people so much, why do our poor people keep voting for more sales taxes. We all know which disctricts put TSPLOST over the top and forced it on not only us, but on our surrounding counties. Texas lives on 9.5% sales taxes (7% state and a maximum of 2.5% local option) and NO income tax. And they are doing quite nicely, thank you. We ALREADY have 8% sales tax and another 5% state income tax. Apparently sales taxes DON'T hurt the poor people or they wouldn't keep voting for them.

effete elitist liberal
3147
Points
effete elitist liberal 01/21/13 - 09:49 am
5
6
Rich people don't buy consumables?

As usual, Humble is full of sound and fury this morning. She asserts, with absolutely NO PROOF that "The idea that a sales tax burdens the working people more than the rich is completely unfounded." Actually, it's pretty "founded." A quick search on Wikipedia provided the fact that state sales tax paid, as a percent of income, is highly regressive. The bottom 20% of income earners paid 2.1% of income in state sales tax. The next 20% paid 1.8%. The top 20% paid about 0.55% and top 1% paid 0.3%. In other words, the poorest paid 7 times the sales taxes the richest paid, as a percent of income. You want FACTS, Humble? You got 'em!

Techfan
6461
Points
Techfan 01/21/13 - 09:50 am
3
6
The cost of processing a 1

The cost of processing a 1 cent payment would probably be more than the penny. Plus postage. Under the unFair tax, the poor do ok due to the prebates, the rich make out like bandits, and the bulf of the tax burden is passed to the already struggling middle class and working people. Rent or have a mortgage, you get taxed on it. All food, medicine, clothing, electricity water and sewerage bills, gasoline, car and car payments, doctor bill, the list goes on and on, all woud have a 30% tax added (mortgage payments would just be on the amount of interest). How about a nice expensive operation? The insurance company or the hospital aren't going to eat the extra 30%. That will fall on the patient. Every service, an added 30% tax. The prebates are squat when you consider how much everything woud cost. It woud kill the housing market, because new construction would cost an additional 30%, with existing houses taxed at zero. It would kill the auto industry (until the supply of used cars start falling apart) because a 1 year old car would be taxed at zero and a new one an additional 30%. It's a scheme by the very wealthy to grow their money tax free and have the middle class shoulder all of the burden. Also, that's just with the figure they came up with. It's revenue neutral so it could be 40% or 50%. Do like the last administration and start a couple of wars, you start jacking up the percentage. Normal people won't have enough money left to live. Don't forget you also have to have a Constitutional Amendment to overturn the 16th Amendment. It's taken an average 2 1//2 years to ratify one, so you get both taxes until ratification. Bad plan, bad idea, hopefuly, it'll stay with the fringe far right and never be taken seriously.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 10:04 am
5
2
I guess someone didn't read
Unpublished

I guess someone didn't read the book detailing the "prebates" of the fair tax that take care of the "regressivness" and then some. They prefer to rely on Wikipedia.

Techfan
6461
Points
Techfan 01/21/13 - 10:04 am
4
3
List of taxes in Texas

Taxes and Fees

911 Emergency Service Fee
911 Equalization Surcharge
911 Prepaid Wireless Emergency Service Fee
911 Wireless Emergency Service Fee
Automobile Burglary and Theft Prevention Authority (ABTPA) Assessment
Automotive Oil Sales Fee
Bank Franchise
Battery Sales Fee
Boat & Boat Motor
Cement Production
Cigarette
Cigar, Tobacco Products
Cigarette/Tobacco Advertising Fee
Coastal Protection
Coin-Operated Machines Tax
Controlled Substances
Crude Oil
Diesel Fuels
Fireworks
Franchise
Gasoline
Hotel
Inheritance
Insurance Maintenance Tax - Workers' Compensation Research
Insurance Maintenance Taxes - Texas Department of Insurance
Insurance Maintenance Tax - Division of Workers Compensation/Office of Injured Employees Counsel
Insurance Premium Tax - Independently Procured
Insurance Premium Tax - Licensed Insurers
Insurance Premium Tax - Surplus Lines/Purchasing Groups
Insurance Premium Tax - Unauthorized Insurance
International Fuel Tax Agreement (IFTA)
Liquefied Gas
Loan Administration Fee
Local Property
Local Sales & Use
Manufactured Housing
Miscellaneous Gross Receipts
Mixed Beverage Tax
Motor Fuels Transporters
Motor Vehicle - Gross Rental Receipts
Motor Vehicle - Local Sports and Community Venue Sales and Use
Motor Vehicle - Sales and Use
Motor Vehicle - Seller-Financed Sales
Motor Vehicle - Texas Emissions Reduction Plan (TERP) Registration Surcharge
Motor Vehicle - Texas Emissions Reduction Plan (TERP) Surcharge
Natural Gas
Office of Public Insurance Counsel (OPIC) Assessment
Oil & Gas Well Servicing
Oyster Sales Fee
Pari-Mutuel
Petroleum Products Delivery Fee
Property Tax
Public Utility Gross Receipts Assessment
Retail Charge Account Delinquency Fee
Retaliatory Tax
Sales & Use
School Fund Benefit
Sexually Oriented Business Fee
Sulphur
Texas Emissions Reduction Plan (TERP) - Off Road Heavy Duty Diesel Equipment Surcharge
Telecommunications Infrastructure Fund (Repealed)
Volunteer Fire Department Assistance Fund Assessment

Humble Angela
41338
Points
Humble Angela 01/21/13 - 10:06 am
2
2
Techfan. While I don't trust
Unpublished

Techfan. While I don't trust the Government to stop income tax without removing that power from the constitution, they are not REQUIRED to collect income tax per the constitution. Just a point of order.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 10:08 am
4
4
I don't think a list of taxes
Unpublished

I don't think a list of taxes was necessary. MOST of us believe we are taxed enough already..thus TEA.

Techfan
6461
Points
Techfan 01/21/13 - 10:16 am
4
4
" Under the unFair tax, the

" Under the unFair tax, the poor do ok due to the prebates". Read and don't assume.
2012 prebate for 1 person: $2,569 per year Rent $1,000 a month=$12,000 per year. Tax under unFair tax just on rent $3,600 per year.

Techfan
6461
Points
Techfan 01/21/13 - 10:19 am
4
4
That was Texas, one of the

That was Texas, one of the states without an income tax. States have to have revenue, it's made up somewhere. If not from income, then from gasoline, betting, or a coin operated machine.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 10:20 am
5
4
How is it unfair to pay your
Unpublished

How is it unfair to pay your fair share?

effete elitist liberal
3147
Points
effete elitist liberal 01/21/13 - 10:31 am
5
6
"prebates" of the fair tax

Nice try, Humble, but "someone" did read your post, carefully. You wrote of "prebates" in some Fair Tax proposals. But the Fair Tax is just that, a proposal. I was writing about the real world, where so far as I know, there are no prebates. The fact remains that in the real world, state sales taxes are unarguably regressive. The next time you challenge "someone," please specify whether you are talking about reality, or some fantasy Tea Party scheme.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 10:35 am
5
4
Since there IS no national
Unpublished

Since there IS no national sales tax it's certainly just a proposal, so your attempt to discredit me isn't real world either. Nice try.

Why is it a fantasy? Was income tax a fantasy before the 16th amendment, or was it a serious proposal? The next time you challenge "someone," please specify whether you are talking about reality, or some fantasy liberal talking points.

Techfan
6461
Points
Techfan 01/21/13 - 10:44 am
6
3
Fair share? 100% of your

Fair share? 100% of your income is taxed to the point you can't afford to live and had to eat through your savings because everything just went up 30% and taxes are added on services that weren't taxed before vs. 5% of your income is taxed and you have billions that grow totally untaxed. Hmmm. Which is the fair share?

justthefacts
22728
Points
justthefacts 01/21/13 - 10:51 am
6
2
Fair Tax

Techfan's distortion or the Fair Tax idea has been proven so many times it is repetitive and tiring. Besides, it will never happen. Taking the taxing power away from the politicians is something that is pure fantasy. How else would they buy votes?

Techfan
6461
Points
Techfan 01/21/13 - 10:52 am
4
5
Hopefully, that's all it will

Hopefully, that's all it will be. A proposal by far right Boortz and far right Abramoff buddy Linder. Yeah, they look out for the working folks.

allhans
24009
Points
allhans 01/21/13 - 11:02 am
5
1
Whew..all of this gives me a

Whew..all of this gives me a headache. We all know the country is bound to implode under it's own weight ( in the not too distant future)...too much government..too much debt..boom!...

effete elitist liberal
3147
Points
effete elitist liberal 01/21/13 - 11:13 am
5
7
Humble

Humble, you can spin things any way you want to, but the fact remains that today, in the real world, state sales taxes are regressive. Your argument that that don't necessarily have to be may be true, but right now they are. Conservatives dislike all taxes, but dislike sales taxes the least because their burden as a percentage of income falls most heavily on the poor, least heavily on the rich. People can disagree on whether that's fair, but not whether it's true, as you did when you said "The idea that a sales tax burdens the working people more than the rich is completely unfounded."

Humble Angela
41338
Points
Humble Angela 01/21/13 - 11:16 am
5
3
Read "Fair Tax." or base
Unpublished

Read "Fair Tax." or base your argument on fantasy. The choice is yours.

justthefacts
22728
Points
justthefacts 01/21/13 - 11:24 am
6
2
Interesting

http://michaux.augusta.com/content/phil-mickelson-pondering-drastic-chan...

Notice, the left wing interviewers's perpective. Kind of sums up the liberal view. "You have too much, you should let the gov't have it".

justthefacts
22728
Points
justthefacts 01/21/13 - 11:23 am
4
3
Fair Tax

Again, your whole viewpoint on the Fair tax comes from the wacky left wing publications you love to read. They have been disproven on this very site repeatedly. No use wasting the time on you.

soapy_725
43757
Points
soapy_725 01/21/13 - 11:34 am
1
0
Not to mention the double, maybe triple taxation
Unpublished

on those who have been fooled into having or moving their IRA's to ROTH. "Pre taxed retirement, no deferred." This is one Boortz said was just one of the insignificant problems. But who cares about the baby boomers with their savings, already taxes once, drawing them out and having them taxed again. Wonder if the same guys who sold us Fair Tax "books" also sold us ROTH pre taxed IRA's "books".

justthefacts
22728
Points
justthefacts 01/21/13 - 11:55 am
6
2
EEL

Of course your argument is when viewed as percents, not actual dollars, correct? The Federal debt needs to be paid off in actual dollars, not percentages.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 11:59 am
6
2
Also...EEL....according to
Unpublished

Also...EEL....according to your logic, the sale of ANYTHING is regressive and unfair. If I buy a car, do they charge me based on my income, or based on the value of the car? When you go to a movie, do you have to show your W-2 in order for them to calculate how much you are charged?

I guess we will just pay off the national debt with fantasy percentages.

Humble Angela
41338
Points
Humble Angela 01/21/13 - 12:13 pm
5
2
Those who are paying ZERO
Unpublished

Those who are paying ZERO taxes sure are doing their part to maintain that infrastructure, right Dhareese?

Humble Angela
41338
Points
Humble Angela 01/21/13 - 12:16 pm
7
2
"I'd post a little more often
Unpublished

"I'd post a little more often on here, but then I'd have to buy this paper and be supporting/subscribing to a conservative, and sometimes intentionally misleading, philosophy."

Intentionally misleading? Once again, I don't imagine you care to back up that attack with facts, do you?

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