STUMP » Articles » Taxing Tuesday: Where Are the Highest Taxes? » 2 October 2018, 17:29

Where Stu & MP spout off about everything.

Taxing Tuesday: Where Are the Highest Taxes?  

by

2 October 2018, 17:29

I’m going to the Tax Foundation for this, as they’ve got good data sets, but we’ll see how it slices, shall we?

How High Are State and Local Tax Collections in Your State?

Unsurprisingly, New York is up there… but what’s going on in #1 North Dakota? That’s a high tax state?

Many people are surprised to see North Dakota as the state with the highest collections per capita, but this leads to an important conversation about the strengths and limitations of different ways to measure taxes. Taxes can be evaluated according to their marginal rates, effective rates, tax burdens, collections, and so on. While per capita measurements allow comparison across states with different populations, they do not show who is actually bearing the economic cost of the tax (the tax incidence or tax burden).

In the case of North Dakota, because the state relies so heavily on severance tax revenue from oil extraction—and therefore “exports” a substantial share of its taxes to residents of other states—total tax collections per capita are an especially poor representation of the actual tax burden that falls on North Dakota residents.

While companies in resource-extraction industries are legally responsible for paying severance taxes to state revenue departments, companies pass the cost of these taxes along to consumers in the form of higher prices. It is ultimately oil and gas consumers across the country who bear the economic cost of oil extraction taxes in North Dakota. Severance taxes in other states have similar impacts on out-of-state residents. It is important to keep both legal incidence and economic incidence in mind when evaluating the true costs of any tax.

Well, that’s annoying.

Let’s try a different method.

TAX BURDEN

The Tax Foundation has another metric – tax burden per capita:

For nearly two decades the Tax Foundation has published an estimate of the combined state-local tax burden shouldered by the residents of each of the 50 states. For each state, we calcu­late the total amount paid by the residents in taxes, then divide those taxes by the state’s total income to compute a “tax burden.” We make this calculation not only for the most recent year but also for earlier years because tax and income data are revised periodically by govern­ment agencies.

The difference from that first map is that they look at total tax revenue taken in by the states (which can be imposed on nationally-operating companies that distribute the burden on other people outside the state – as with North Dakota) and this second one is looking at what the residents are actually paying in taxes. Also, the first one is a little more fresh (up to FY 2015, and this one stops at 2012).

So here are the 2012 results:

For New York: WE’RE NUMBER ONE!!!!

via GIPHY

Looking at the footnotes of the study, the earliest this could have been published is January 2016, so there is obviously a substantial lag. Also, I highly doubt NY has been pushed off its #1 perch.

(CT is #2, also unsurprisingly)

HIGH TAX BURDEN LOCALES TRY TO PUNCH BACK

So, given that I live (by choice, I will remind you) in the highest tax burden area – what do you think my local politicians are doing?

Trying to fight federal tax law! With my tax dollars! Woot!

WSJ: New York Towns Gearing Up to Fight IRS Ruling on Local Taxes

New federal code capped state and local tax deductions at $10,000, hurting some residents in the high-tax suburbs

Again, it hurts extremely few, unless they had their taxes so optimized, they were paying less than I do.

For most of us, we just don’t get those sweet, sweet federal tax cuts. Extremely few of us would be paying higher federal income taxes. It takes some really weird situations to make that happen.

An emerging coalition of New York municipalities is preparing to challenge proposed Internal Revenue Service regulations that clouded the ability of cities and towns to set up funds that allow residents to pay their local taxes as charitable contributions.

The group of municipalities—*which includes Westchester County*—will file public comments with the IRS and is considering a lawsuit, according to Assemblywoman Amy Paulin, a Democrat who lives in Scarsdale.

The new federal tax code signed into law by President Trump in December put a $10,000 cap on state and local tax deductions, a change that has hurt some residents in New York’s high-tax suburbs.

State lawmakers approved a bill in March that allowed the creation of the charitable funds. Under New York’s law—which is similar to legislation adopted in New Jersey and Connecticut—localities can issue a taxpayer a credit against their property taxes for up to 95% of the amount donated to a designated charitable fund. New York may issue credits against state income tax for up to 85% of a donation.

Fourteen New York municipalities have set up the charitable funds, according to a database of local laws and interviews with municipal officials. Charitable deductions against federal income aren’t limited, but the IRS rule would block the relief intended by New York lawmakers by requiring taxpayers to subtract the value of the state credits from the amount of their donation.

Yes, because these are bogus “charities”. Tough.

Daniel A. Rosen, a partner at Baker & McKenzie who is working with the coalition, said the IRS proposal is contrary to the agency’s earlier treatment of donation-and-credit systems in states such as Alabama that provide state incentives for taxpayers who donate to funds supporting community college programs.

Guess what: they’re screwed now, too.

The Village of Rye Brook collected $21,169 from six taxpayers this summer, but Mayor Paul Rosenberg expects the fund will be dissolved.

In my own town, the town supervisor warned everybody about this, and I think they never did set up a fund, thank goodness.

Scarsdale Public Schools moved to set up a fund but waved off. David Albert, a spokesman for the New York State School Boards Association, said he was “warning districts to wait until we received more guidance.”

Yup. Warren (our town supervisor) had also warned us about pre-paying 2018 property taxes in 2017. I didn’t attempt it myself.

“It’s monetary, but it’s also a protest,” Ms. Paulin said. “I worry that the changes to SALT are going to destroy our way of life in our state, and I want to be part of an effort to preserve that.”

Bah. Making Texas subsidize our extremely rich county.

via GIPHY

I say we should not make others subsidize our high living.

TAX TWEETS

Here we go! Looks like there’s a new Get Trump tactic this week… this time, I’m sure they’ve got him!




They always say “conservative columnist” and then you have to go onto read that it’s Jen Rubin, who is definitely not conservative, though she pays to wear that label by WaPo. Don’t know who reads her and takes her seriously except for leftists.


Hey, this time it might really work.

It could be used as grounds for impeachment if the Dems win the House… but let’s be serious. A Democratic House would impeach Trump for having two scoops of ice cream when his guests get only one. The Democrats are intent on blowing themselves up, and I, for one, have no interest in stopping them from destroying their own party.

Let’s look for some non-Trump tax tweets.








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