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Telecommuters May Owe Extra State Taxes
marct22 writes "According to Cnet News, the US Supreme Court refused to hear an appeal by a Tennessee programmer who was forced to pay extra taxes because he was telecommuting to a job in New York. Apparently he worked in NY 25% of the time, which he didn't argue about, but the other 75% of the time he worked from home in Tennessee, which doesn't have income taxes. Also, it appears that right now, for those of us who live in one state and telecommute in another may be doubly taxed if both have income tax. There is a Telecommuter Tax Fairness Act in the Senate, but it has not emerged from committee so has not been voted on."
Don't tell me half the people here haven't used these tools...Work on a website in California? A chicago colo? Did you earn money for it?
...Do you owe taxes on it?
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A guy plies his trade in a place where certain taxes apply and he has a problem with this? Since when did not having a physical presence in a place exempt you from from their laws? Really, as far as New York is concerned this guy is working in their manor and drawing an income from their economy and is therefore liable for their taxes. The fact that he does not actually shift his carcass over the the state line is irrelevant. Everyone expects free beer these days.
Modest doubt is called the beacon of the wise. - William Shakespeare
What about people who live next to state lines? Surely there are other cases where people live in one state and work in another. (it reminds me of that puzzle about which four states one can walk through in a day...i forget the answer though.)
12:50 - press return.
As it becomes more commonplace, congress will figure it out. They always do, right?
If brevity is the soul of wit, then how does one explain Twitter?
I have friends who telecommute to PA from their ghetto^H^H^Hhippy^H^H^Hcheap apartment housing in Brooklyn.
They surely can not afford to pay late taxes; they simply do not have the money.
I feel bad for them.
Even though I think they made bad career moves, they choose to work from home across state lines and most can not afford to pay back taxes.
If you "get" pointers add me as a friend (116)!
Seriously, don't let them make this the law. It will kill telecommuting. A fair amount of people across the nation telecommute on a daily basis.
GJC
Gregory Casamento
## Chief Maintainer for GNUstep
Programmers working in India who are using Servers hosted in the USA to do development for a US firm will owe US Income Tax ;)
You don't pay any taxes !!!!
Yay for da man !!!
This should be abolished anyway. This is yet another example of why.
---- Booth was a patriot ----
This would be stupid. If this were true, then I would owe my left arm. Let me explain.
I worked as a flight attendant. I was based out of a nearby state. And very often, I would be sent to other airports to work out of there. So, could I possibly owe taxes in every state I worked out of?
I know this is telecommuting, but the idea is the same, I technically lived in one state and worked out of many others...
Stupid...
Taxes pay for the services that you use. Is this guy using the roads to get to work? Are his kids going to the schools? No! Why should he pay for that stuff? The taxes he pays in his home state cover this stuff in his home state. The people who live in the other state should be paying for those services provided there.
New York businesses that rely on telecommuters will pay for this, one way or another. They will either lose prospective employees due to the double-taxation, or they will have to offer higher salaries to compensate, which means more money flowing out of New York into other states. From an economic perspective, enforcing this is not going to benefit New York.
domain combinatorics
What do you expect to happen in a technologically naive legal system when you use a term that implies you're "going" to a location, even though you really aren't?
Bill Clinton: Pimp we can believe in. - The Shirt!!!
This is why the US of A needs the FairTax.
It would do away with all this income tax malarkey. At least at the federal level. Once that happens, it's a good bet that individual states would follow suit.
"Michael, I did nothing. I did absolutely nothing - and it was everything that I thought it could be."
of a bit from an old film i can't recall the name of. There are a group of people selling manure, and getting taxed on the sale of it. They argue that since they paid tax on the hay, the raw material was already taxed. "Taxed at both ends" (yes i know that wouldn't work in real life, it was a kids film and i was a kid, but the adage seemed to fit the article)
Just a supposition.
I assume you telecommute.
Most friends I have who telecommute have been diagnosed with Asperger's Syndrome, a social disease.
They do not like person-to-person interaction that is required at a normal 9 to 5 office job as a coder or engineer.
I do not blame them and I understand why the do it.
But, I challenge those with Asperger's to recognize and then work to fight it be forcing social interaction within your comfort levels.
Here is more information on Asperger's: http://en.wikipedia.org/wiki/Asperger's_syndrome
If you "get" pointers add me as a friend (116)!
... where its a-okay to outsource to China and India, but to a low-tax state? Hell no.
-Eric
SJW: Someone who has run out of real oppression, and has to fake it.
If he's drawing income from money that is being taxed by New York laws then he owes New York taxes on it as well. Its New York money Huck! What does he expect to do? Itemize your work time down to the state. How about that 5% time I spent working at the camp in Kentucky! If it works on the percentage of time you spent working in a particular state then some of us would be under Atlanta tax laws just from being stranded in that damn airport.
For some reason I refuse to use either spell check or the spacebar properly.
If you're in the military you can choose your "state of residence" and that's the state that you actually pay taxes to, not the in the state that you work. Florida is a brilliant choice because there is no income tax. So even if you live in New York, you won't pay New York income taxes. I find it somewhat ironic that a telecommuter pays taxes in New York without actually living there whereas a Military officer would live there and not pay taxes.
Caveat: This might have changed in the past 4 years, but I know in 2001, that's how it worked. The military has been, as of late, cracking down on people who claim non-tax states as their home while having no plans of ever actually living in that state or having any ties in that state.
Men occasionally stumble over the truth, but most of them pick themselves up and hurry off as if nothing ever happened.
Darn welfare leaches.
2 years and no mod points. Join reddit. Because openness is good.
Although he may be deriving income from said state he is not benefiting from that state's services. Roads, public transit, whatever. So why should he pay taxes there? Some cities on state borders do have exemption clauses. A city (Texarkana) on the Texas Arkansas border is an example. Texas has no state income tax but Arkansas does. Residence of Texarkana Arkansas are exempt from Arkansas State tax.
It's always been my impression that this type of thing wouldn't fly, that you were just taxed in the state you live in. For an example around me, DC would dearly love to tax commuters from MD & VA who pour into the city every day yet provide no direct taxes. Every time DC tries to implement such a commuter tax, they're shot down. I didn't realize that states could do this - I assumed that if you lived in CT and worked in Manhattan, all your income tax would go to CT. Guess I was wrong.
Pennsylvania and Ohio have reciprocal tax agreements, where even if you telecommute, you pay your own resident state's taxes only. It's kind of neat, because less headaches for you. This is state tax only, you still have to look at local city taxes, depending on city you worked in.
What NY services does he consume? Should he also expect fractional benefits? NY and California suck ass and deserve shitty economies. Tyrany of the populos states.
"God fights on the side with the best artillery." - Napoleon, Marshal of France - speaking truth to power
For companies that are either small enough to nimbly do so, or large enough to handle the red tape for a large number of employees, it seems the solution to this problem would be to create new corporate entities in each state containing some of their telecommuters. The telecommuters would then be made employees of their local corporate entities.
That really screws the 10-500 employee businesses that make up the backbone of the US economy, of course. They have too much infrastructure to just go ahead and do this for the fairly nominal setup cost a small company would encounter, but too little to already be incorporated in multiple locations.
Don't you pay state income taxes based on where you live not where you are employed? I know some states are like that. I work in Maryland and live in Virginia and I don't pay any Maryland taxes because I don't live there. Maybe this varies by state. If that is not generally the case I believe that states which border each other usually have a reciprocity agreement to prevent double taxation (or at least limit it to the higher of the two income taxes). interesting though.
I just emailed the IRS informing them that CmdrTaco owes a decade of back taxes.
INFORMANT FORM
Name: Robert Malda
Aliases: CmdrTaco, (1)
Residence: Michigan
Company: Slashdot (OSDN)
Occupation: Human dupe machine, spellcheck input tester
Taxes Owed: 120 months
Salary: $0.02/click
If you "get" pointers add me as a friend (116)!
Soooo,that means if i lease time to clients in other states, thru a 3rd party hosting service, i might be hit up for taxes in 3 states?
Great way to ruin an already hurting industry.
Anyone in washington remember the golden goose story?
---- Booth was a patriot ----
So if I work from home and do the work at home but only transmit that work back to the "main office" when it's done where am I really working?
What if I don't use a computer at all but do all my work at the public library in Tennessee and then make a POTS call to the home office and give them the results of my work?
Now where do I pay taxes?
Sadly since I still have investments in the US I still have to file taxes there (40 pages odd) and NZ (2 pages - god I love a simple tax system).
I also live in London, and I think we both know the difference between Income Tax and Council Tax. Nobody is asking this guy to pay for local amenities. However, after doing a bit more Googling, I think that the issue is not that he is being asked to pay Income tax in new York for his telecommuting, but rather that he is being asked to pay that tax on his full income, without regard for where he earns it.
Modest doubt is called the beacon of the wise. - William Shakespeare
First of all, except for a few rare exceptions the government does not GENERATE revenue. Thats why it has to tax the citizens. If it generated revenue, it would be self-sufficient.
That being said, a better way of doing it would be via a sales tax. That way you get charged for the commerce you actually participate in, not your potential to particpate.
---- Booth was a patriot ----
It seems to me that if it turns on the convenience of the employer, all you need if for the company to say it's for their convenience that the employee can spend extra time working that would have been spent commuting.
I live in Jersey and work in New York, but I get credit in New Jersey for the (higher) income taxes I pay in New York, so I wind up paying only NY taxes.
"Was it a millionaire who said 'Imagine No Posessions?'" -- Elvis Costello
How soon before top-tier, in-demand programmers can demand "tax indemnity" from their employers and clients?
Of course average programmers without unique skills won't usually have this kind of bargaining power.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
He resides in a different state and uses their infrastructure and has to do jury duty in that state, not New York.
That's why his employer pays taxes...
when I say to them "KISS MY ASS!!"
There are a lot of taxes you can point to as being bad, like the income tax, but the biggest burden right now is how there are so damn many kinds of taxes! Just keeping up with them all and doing your tax preparations is a nightmare and HUGE time/money waster for millions of Americans. If we just switched to one tax, that simplifcation alone would save billions of dollars in explicit compliance costs alone (and billions more in redirecting people to doing what they like, not what has tax advantages).
Just ask yourself: how much is your time worth, and how much time did you spend preparing taxes? How much did you pay someone to do your taxes? What things did you do differently because of tax advantages? What did your company or employer do differently? How much does it spend on compliance because of the different kinds of taxes?
But then every time someone comes up with the simplifcation idea, like a Flat Tax or the so-called "FairTax", some genius figures out it will benefit the rich. Except that reducing this tremendous burden from the economy helps the poor too. This is not about "screwing the poor". If you want to make transfers to the poor, make a separate program. Don't complicate everyone's taxes to help. Seriously, I'm beginning to think some people have a scorched earth policy toward the rich - they'll advocate policies to hurt them even if they hurt the poor even more!
Now, I'm not necessarily endorsing the Flat Tax or "FairTax", but they're on the right track - if you just had one kind of tax (or even just one kind of tax for each level of government) the savings from this simplification alone would make the world a lot less kafkaesque and eliminate complications like in TFA.
Rank my idea: http://www.sinceslicedbread.com/node/531
The reason the Supreme Court probably refused to hear this case is specifically because there is legislation in the works to address the issue. They tend to let the legislative system work before rushing to judgement (there are exceptions; namely "political suicide" issues like abortion and gay rights which the legislators won't touch.)
Of course, if TN has no income tax, I guess there would be no credit for it on this guy's NY taxes. *shrug*
Warning: Apple/Nintendo fangirl. Likes her electronics cute & cuddly. May be rabid.
I'm not sure if it is true, but I heard on the radio that NBA players have to pay taxes in each state they play in, so I'm guessing that you may indeed owe taxes in each state. But, I imagine it would only be for the portion you earned in that state. This also happens if you move in the middle of the year. So you could end up having several state tax forms to fill out for relatively small amounts.
Just what is it that you oppose about libertarians? You don't think that people should be free to control their own lives? You believe that it wrong to oppose the initiation of force against anyone?
"Prefiero morir de pie que vivir siempre arrodillado!"
But this is just short-sighted. Business will just go to states with more tax-friendly policies or maybe offshore.
Engineering is the art of compromise.
Libertarians are saying this? Sounds more like socialists to me..
---- Booth was a patriot ----
IANAA (I am not an American), but didn't you guys have some kind of beef with 'Taxation without Repesentation?' Surely this is exactly what NY State is demanding?
If a company in New York opens a branch office in California, would the employees of the Cali. branch office be obligated to pay New York taxes? Of course not. Why is this man's place of employment, his home office, not considered a branch office of the company? What is the distinction? This clearly discriminates against one form of remote office over another.
What exactly rises to the level of "You worked in state X and must pay taxes?" Is it the location of the business? If so, why aren't we all paying taxes to the location of the home office of whatever company we work for? Is it the location of the services rendered? If so, then why aren't we paying taxes for each state of customer calls? Or should we be paying taxes for everywhere in the world when the services are on a globally accessable web site?
This opens a great big mess-o-worms.
Happiness is relative, Based upon the way we live.
asa black man I agree coletely. power to the poeple!
Whatever. Consumption taxes don't make for fair taxes. Econ-101 guys. Progressive taxes like our current income taxes do. What is stupid and should be easily correctable is a federal law saying you only have to pay one state incoming tax at most. If your state doesn't have income tax, then you shouldn't have to pay. Pretty friggin simple
If both states have an income tax he would get a credit on his resident state tax return for the income taxes he pays to New York. You only pay tax to one state for the same dollars of income. This guy is unusal because he lives in one of the few states without an state income tax. If he lived in North Carolina and did work in New York... He would bay tax on the Non-Resident New York tax return and then claim a credit for that tax on his North Carolina tax return. This is the way its been for years....Nothing to see here.... Nothing new here......
PA and New Jersey have the same deal worked out. I worked one summer in NJ but PA taxed me. Now, however, I work in Delaware, to which I pay taxes but still have PA residence. I end up paying non-resident tax to DE but then claiming those taxes as a deduction on my PA return, so the money isn't taxed twice.
This makes sense to me and I figured it was applied elsewhere. I guess it's not.
Grandparent sig: 100% Anti-libertarian
Parent question: Just what is it that you oppose about libertarians?
Parent sig: There is no worse tyranny than to force a man to pay for what he does not want merely because you think it does him good
Maybe it's because your definition of "worst tyranny" is pretty weak. Most libertarians I've met focus on petty technicalities which are only important if you ignore the big picture of murder, mayhem, and general starvation and deprivation. Their worries generally fall into the category of counting angels on pin heads.
Infuriate left and right
you dont generate revenue by simply redistributing it.
To *generate* you have to actually provide a product or a service. 90% of government 'revenue' ( as you put it ) doesnt fall under either of these. ( and no, giving money to welfare people isnt a generating service, its just a redistribution )
You must also think that its the government's money with that attitude.
Im glad you dont have any input into the tax laws.
---- Booth was a patriot ----
If you're selling a service, and a state you're selling your service in taxes that service, then yes, you are responsible for that. Most states don't tax much in the way of services. Why? Poor people buy goods disproportunately, rich people use services disproportionately, and taxing those would be less regressive and more fair. But poor people don't vote, and rich people can buy politicians, cheap.
And in this specific example note that he DOES use state infrastructure 25% of the time in the excecution of his job, and he benefits for things like worker protections et al one such as himself could find himself in need of were he to have a problem with his employer. He may in fact suck it, start a consulting company, of kill himself. I don't really care which.
They can do it if they can get away with it. NY has. DC could do this but they don't have the sovereignty of a state. Everytime they've tried it (and they have), Congress has slapped them down. DC residents have no voting representatives in Congress, so they are helpless. VA and MD could do this to each other - many people commute both ways, but they have better sense. This would be more trouble than it would be worth.
There is not nearly enough love in the world, but there is far too much trust.
Does this just apply to employees or would it also apply to independent contractors?
I know Slashdot isn't the best place for tax advice (no one hears pays their taxes, right?), but what if the income was filtered through an LLC? He works for companies in several states, the companies pay his LLC, the LLC pays him. Does this remove the necessity of paying taxes individually to each state?
There is no worse tyranny than to force a man to pay for what he does not want merely because you think it does him good
.... I could go on, and on, and on, and on.
Sounds good, but just rediculous when you think about it. Examples of "worse tyranny":
1) Force a man to pay for something he does not want because you think it will hurt him.
2) Force a man to pay for something desired by the ruling class, to hell with whether or not it hurts him.
3) Force a man to sit and rot in prison, unable to even distract himself from his misery with work routines because he disagrees with the ruling class.
4) Force a man to occupy a particular position in society, with no hope or opportunity of improvement or self-betterment.
5)
PS: I'm a populist libertarian.
I have no problem with your religion until you decide it's reason to deprive others of the truth.
Did i say to abolish all taxes? No.
Did i say they had to be self sufficient? No.
I simply stated 2 facts with that statement. Nothing more.
Do you often read into things and make things up this badly? Being a smart ass gets you no points with me.
---- Booth was a patriot ----
"Income" taxes are a massive political control tool, a big hammer they hold over the heads of everyone who is non-elite, and nothing more. They killed President Kennedy (primarily) over his vow to bust up the Fed and bring back real money.
Back before the congame happened that created the fed and brought us the "income" tax, the federal government was funded primarily by excise taxes, and was held to a much smaller size, as it was supposed to be. That started the ball rolling on political control and inflation, and Nixon finished it off with the Bretton Woods agreement.
This is a very involved subject, no way to really address it even in a series of posts, but it's a fascinating bit of history to go back and do some research on.
it means the government should have the right to extract as much from them as they see fit?
Perhaps we should introduce you to Hitler, he probably thought that way too.
Your post being rated as it is only proves that the poltical slant present at slashdot is to the point of damaging intelligent discussion. It is no more insightful or interesting that watching apple, linux, and the occasional microsoft fanboi get modded as such for their equally inane postings.
Do you just like people who know pointers, or are you hoping someone can explain them to you?
William of Ockham had no beard. The most likely explanation is that it was chewed off by squirrels every morning.
I live in Texas where there is no income tax. But we had a judge declare our current school funding system illegal. SO naturally some democrats have suggested that we institute an income tax to pay for our schools, since "that's what the other states do". WTF? Other states use property taxes, maybe suplemented by sales/income taxes. But as long as there's a way to get more money from me someone's going to want to do it.
Genius is one percent inspiration and 99 percent perspiration, which is why engineers sometimes smell really bad.
Suppose he lived in NYC but worked out of state 75% of the time, a travelling salesman or hot shot fixer upper of some sort? Should he deduct that 75% then?
I had a job in one state while living in the other. Commuted across state lines. Should I only have paid income taxes on that portion of the day where I was actually in the state?
Suppose I take a paid vacation and use paid holidays to travel out of state. Should they stop taxing me for those periods? Maybe the states I travel thru should tax me for that portion of the time I am in their state. After all, I am paid for that vacation and holiday time.
Sure he owns a house elsewhere. He pays smaller property taxes, I bet. He pays less for food too, I bet. But he works in NYC 25% of the time. How many people do such a thing? Are they supposed to make a special law just for those few?
Infuriate left and right
And how is it different from bandits taking a share of any valuables that pass through their territory?
This wouldn't even be news (except as a humorous short) if NY was merely "demanding" payment from someone who didn't live there or have seizable property within the state borders. The problem is that NY can extort money from local employers, just like any other sufficiently powerful city/state/country/local warlord.
The idea is actually very different. Under most state laws, if you work in the state, you are subject to its income tax. Also, as a general rule, you can only be taxed by one state at a time. So, lets say you are a baseball player. You physically go to a ball park in a different park. And you ply your trade there. Thus, you owe income tax in that state, on the portion of income you earned there. Over a year, you might play in 30 different states. That means one 1040 + 30 state returns. Pain in the ass. But your income shouldn't be taxed more than once. So you might owe 1% of the $100,000 for 5 games in State A and 3% of the $200,000 you earned at your home stadium in State B.
That doesn't mean that you should worry. Truck drivers don't pay income tax to every single state they drive in...that would be silly. They have a home base that they work from. In fact, I think they are exempted from the baseball player rule. Same thing with airline stewards...I think. Ask your accountant or lawyer. *ducks*
Does this mean Microsoft has to pay income taxes in every country adn state of the world where someone might buy some of their products? Since they havn't done so would their programmers be guilty of tax evasion?
Can we throw them all in jail now?
Well, really it doesn't work. Tennessee has some of the lowest quality public schools and people here get fighting mad when you bring up the suggestion of an income tax.
One big issue that Boortz (not an economist) and Linder (not an economist) and the other consumption-tax advocates never answer is: if we go to the "fair" tax, how are child support, welfare eligibility, social security disability eligibility, and every other means-based social program going to be administered? We have a pretty firm belief in the USA that in the event of a divorce, the non-custodial parent should pay child support proportional to his/her income. Sounds like I'll be logging those 5 mile business trips to determine my income for the courts, if not for the IRS.
DC talks and bitches but at the end of the day they won't get into a tax
war with MD and VA. MD and VA could simply blockade DC in retaliation and
starve those whiny beaureacrats and ghetto dwellers.
Still wanna rumble, you Marion Barry loving losers?
A guy plies his trade in a place where certain taxes apply and he has a problem with this?
Uhhh... you didn't RTFA did you?
He said he didn't object to paying the taxes on the income he earned in NY - the problem is that NY is trying to tax him on ALL of his income, whether earned from New York or not.
If someone does a fair amount of telecommuting, they could end up owing more in taxes than his entire income if he "works" in enough states.
Since when did not having a physical presence in a place exempt you from from their laws?
Uhh... pretty much since always?
Or do you think that everyone in the US should be banned from talking about freedom/etc., because Communist China has laws against that sort of thing? I mean, you may not have a physical presence there, but it's not like that should exempt you from their laws, eh?
Really, as far as New York is concerned this guy is working in their manor and drawing an income from their economy and is therefore liable for their taxes.
Taxes are paid on the principal that you get something back for what you put in. This includes things like emergency services (ambulance, etc.), public transportation, police enforcement, road construction, etc.
If he has a heart attack or gets robbed in his Tennassee home, is New York paying the bills? Is New York paying for the street maintainence where he lives?
How about unemployment? If he loses his job, is New York going to be sending him a check every month?
Simply put, taxing those who live elsewhere is contrary to the entire principal of taxation; that those who are taxed gain something in return for those taxes.
I think this case hinges on the 25% issue... the fact that he was "off-site" for 75% of his time isn't relevant (in the same way a salesman might be off-site for long periods of time).
My guess is that he lost the case (and the Supremes chose not to hear it) because he was physically present in New York (at least partially) and thus was a local employee collecting a local salary, whatever his other arrangements might have been.
I would also guess that someone who telecommuted 100% of the time would not face the same issue.
Natural != (nontoxic || beneficial)
You are already double taxed. You pay 30% or so, and your employers pays that same amount for their taxes on you. The only reason you don't see it is because they are required by law to take it on as a tax of their own.
The problem that I have with comments like this is that the extremely wealthy pay the majority of US income tax. Therefore, any change will affect them disproportionaly. Look at IRS data. Taypayers in the top 1%, as ranked by income, pay 34% of all federal income tax. The top 5% pays over 54% of all income tax. The top 10% pay 65% of all taxes. Compare this to the bottom 50% which pays only just over 3% of all income tax. The wealthy are paying their fair share.
It must have been a PITA receiving all those different paychecks from the different airports.
Or were you employed in just one state, and happened to cross state lines during the course of performing your job?
Telecommuters May Owe Extra State Texas? I was confused as hell trying to figure out who was going to get and extra state, and why the hell telecommunications was involved.
Computers allow humans to make mistakes at the fastest speeds known, with the possible exception of tequila and handguns
6 - PROFIT!!!
A couple hundred years later, we like to believe that the ideals expressed during the founding of the country are still important, so a complaint such as this is likely to appeal to a US citizen that has even the slightest knowledge of history.
-- $SIGNATURE
States make money off gambling, sin taxes, property and sales. That should be plenty to run the state. If the state isn't making enough, it needs to cut projects. States shouldn't be allowed to buy new football stadiums, or put off railways for 20 years until the cost is in the billions.
Go over a state budget and look at the pork projects. There is a couple dozen ways to lower taxes, even legalize marijuana and prostitution for taxation.
Bad enough my state (washington) is paying almost 1/2 billion dollars on new buildings when we have empty buildings already owned by the state or empty buildings they can buy..
Oh well, ssdd.
Besides, does this guy get to vote in New York State elections now? If not, it's taxation without representation.
I was thinking the exact same thing. Some of my friends are in a simliar situation because they live on the Wisconsin/Illinois border. I live and work in Wisconsin so I pay Wisconsin Income taxes. Some of my friends work in Wisconsin but live in Illinois. Do they pay the Wisconsin and Illinois income tax? No. They pay the Illinois income tax because that is where they live. They do not get to participate in Wisconsin elections (state and local) because they are not a resident.
This only makes sense.
As anybody living in the Portland Metro Area, to include Vancouver, WA knows, taxes are taken for both where you live and where you work, and parceled out to whichever has the higher tax rate.
Example: Oregon has income tax, Washington doesn't. If you live in Washington but work in oregon, you pay Oregon income tax. If you live in Oregon, but work in Washington, you *still* pay Oregon income tax.
If Washington had a 7% income tax rate, while Oregon has a 9.5% tax rate, you would first have the state of your employer take their share, then the state of your residence take whatever is left.
Example: You work in Oregon, but live in Washington - you would give the 9.5% to oregon, and nothing to Washington (exempt, since you've already paid more than your fair share in tax, and can't be double-taxed, same as the State vs. Federal deductions). Now, if you live in Oregon, but work in Washington, you'd pay 7% to Washington, and another 2.5% to Oregon - rounding out the difference.
Not that it really matters, since WA doesn't have income tax, while OR doesn't have sales tax (yet). The people who get the best of everything work and live in Vancouver/outlying areas, and do their shopping here in Oregon...thus avoiding all of the taxes...illegally, but hey, who's to know?
This story is much ado about nothing. This has been happening for as long as I can remember. You are taxed based on where you live *AS WELL AS* where your employer is located. Telecommute? You're working in a position in that other location, and subject to the tax.
It sucks, and I'm against it, but my opinion doesn't matter...
The telecommuter is physically sitting in his chair in front of his computer working wherever he is physically located. that is where the work is. THAT is where "the work" of typing stuff is being done, in that state. Until we have quantum computing with teleporting bits, joe work is done at joe location, it is not being done "over there" at the other end of the pipe. Now, MORE work may be done over at the other end of the pipe by someone else who gets the transmitted data bits, and it's at that geographical location and is subject to the laws THERE then. Two different sets of work here, it is not "one" set of work subject to one places total control.
This is as close as I can call it.
I see no difference from this and someone working in one state, while their parent corporation who employs them has its incorporation papers filed in Delaware or Nevada or some other geographical area of *corporate tax convenience*. Where is the *work* of this corporation being done then? In Delaware or Nevada if all the buildings and personnel are located in other states?
Can he vote in NY? No? Then no taxes for NY.
higher income taxes != better schools. i submit the Portland Oregon public school system as an example.
To state the obvious, it's not accurate to categorize this as paying "extra" taxes. If I, in NJ, work remotely for a company in Tennessee, I'd save on taxes.
Instead of passing yet another lame law why don't we just repeal the 16th amendment (assuming it was even properly ratified) and do away with Income Tax altogether? This would put the money back into the hands of those whose right it is to keep it rather than distributing it out to those who don't deserve it.
Take not from the mouth of labor the bread it has earned. -Thomas Jefferson
Apparently, you have never traveled for your job. My office was based in Virginia, I physically commuted to Wisconsin for the majority of the week. Work done in Wisconsin was taxed by Wisconsin, and work done in Virginia and vacation, days off, etc were Taxed in Virginia. Yes, even if it was 5% of my time. Then it got more complicated because I moved to Arizona, and add to it that I had to file compensatory status for working in a non-resident state for over a year, my taxes for last year were, to put it simply, insane, and unfortunately, probably will be again this year.
To go off topic a little bit, what about if I don't know if I'm telecommuting? The company I'm at currently has data centers in two states. I have know idea if the boxes I'm using are here or there. Could we all get bit by this as well?
I used to reside in Minnesota and work in Iowa.
I can't recall exactly what I did, but basically I paid the Iowa taxes, and then to Minnesota I paid the difference between what I'd already paid to Iowa and what I would pay to Minnesota.
There was a special form you had to fill out, and it made life a bit more complicated... but it wasn't double taxation.
This is a non-issue, I think.
If the FairTax is so great why haven't we adopted it?
What if the entire Universe were a chrooted environment with everything symlinked from the host?
So long as incumbents have an advantage come election day such abuses will continue to mount. Personally, I advocate laws requiring each ballot to have the number of times taxes have been raised printed alongside the name of the incumbent, a ban on identifying the incumbent on ballots or perhaps even more radical ideas designed to make sure that somebody has to work to remain in office and can't just coast in because he already happens to be on the throne, producing lots of....
If the g'vt kept the data on you that google does you'd better believe you'd be calling it "doing evil"
hmmm.. I was going to make a tasteless joke about people crashing planes in NY's buildings, but I won't.
I can't think right now of any recent discussions with libertarians, but I can give you the flavor of what I meant. There was an interesting group a few years back, maybe still in existance, the Artemus Society I think. Their motto was "We're going back to the moon, and this time we mean to stay" or something similar. They discussed all sorts of things, and I thought them pretty interesting. Some were actually practical, such as what the regolith would provide, best way to build simple fast shelters from local materials and energy, etc. But they also argued incessantly over some of the most nitpicky nonsense. It was the equivalent of covered wagon pioneers fighting over how to lay out city streets, whether sidewalks should be 3 feet wide or 4 feet wide, should there be a grassy strip between the street and sidewalk or should the sidewalk be an extension of the curb, etc etc ad nauseum.
Tons and tons of stuff that wouldn't apply for a hundred years, would be inapplicable then anyway, and was a complete distraction from actually getting to the moon.
That's been my experience with libertarians. I'd love it if government were 1% its current size, if laws couldn't be enforced at all if they were only enforced spottily and rarely, if they applied to everybody at all times. But the reality is different. Arguing about throwing out the tax code in favor of simply paying for services, for instance, is mental masturbation. It is never going to happen. We have a bureaucratic government, it works more or less, that is what we have, and arguing about the details of its idealistic replacement is a sheer waste of time.
Infuriate left and right
That depends on the State. Here is NY, there is an "Entertainers Tax" (don't know the real name). All such people who come to NY, much pay taxes to the state (Ballplayers, etc.).
Anonymous Cowards suck.
I know the feds should'nt be picking up the tab in DC (especially without maintaining control). But that's the polical reality.
I do agree about DC being an armpit though. Major parts need to be 'dozed into the river.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
Is Tiger Woods paying New York taxes on money he makes at golf events that are televised in New York?
If the g'vt kept the data on you that google does you'd better believe you'd be calling it "doing evil"
If this decision holds, offshoring is going to take a beating
Indian wages - American taxes = not much. Oh, but I forgot. The lowest 50% of income earners in America only pay 4% of the income taxes and because Indian salaries would wall within the lowest 50% of income, nothing really changes.
(And no, that not flamebait, it's a fact. Go to the IRS web site and look it up yourself)
Working from home is a help in that regard.
You would need to be smart regarding the contract terms.
John McAfee 'It was like that time I hired that Bangkok prostitute; to do my taxes, while I fucked my accountant'
First, this is wrong. The states may fight over who gets to tax him, but in the end he'll only pay taxes to one state. (Yes, my wife is and accountant.) You are able to deduct taxes you pay in one state against taxes owed in another state.
Second, if he's paying taxes to NY he ought to be demanding the right to vote there. It's taxation without representation (and the right to vote against people who impose such taxes) otherwise!
Now that would make a great Supreme Court case. The guaranteed right to vote in any state that collects anything above a certain percentage of your income in taxes.
Third, I wonder if that includes City and Burough taxes in NYC?
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
The job is located in New York State, regardless of where the employee is located.
Or, work as a company (corp, llc, s-e, whatever) and get a tax professional to help you do business in such as way as to circumvent such rules.
"Every man is a mob, a chain gang of idiots." - Jonathan Nolan, Memento Mori
The problem I see though is that you could live in one high-income-tax state and work in another. This could effectively double one's taxes in extreme cases. Now, of course if you are a consultant and your own business, then the tax situation gets easier. So this is good for freelancers and bad for employees.
And with the attmept at the moment to take away the state tax deduction from one's income tax, this could get even messier.
It also seems to me that this could continue to accellerate offshoring trends...
LedgerSMB: Open source Accounting/ERP
No, but higher property taxes tend to equate better schools.
Yeah I get angry at politicians also.
The U.S. will evacuate you if England has an anti-Amreician revolution. :) Or some other major crisis. If you don't like it, give up your citizenship.
Just tax people based on the state the work took place in.
:) and they dont have (or need) their own income taxes or consumption taxes.
If someone is telecommuting from california to new york, they pay california income tax. And so on.
The downside to this is that anyone who is in a position to do so will try to find a way to telecommute from a state with no income tax (unless they are already working in such a state).
Australia has a much simpler tax system. We have a federal income tax and a federal GST thats applied to almost all goods and services.
The states get given money by the federal government (although how much each state should get is always a sore point
They arnt just sitting at home doing work for a random company.
You're not even close to being self-consistent in your reasoning.
You can't argue that where the person sits locally matters, when you're trying to bleed him for tax on the basis of the non-local location of his employer.
Hmm, this whole thing depends on physical presence. A real lawyer should comment on this, but as far as I figure, this guy performed 75% of his work in Tenessee - sorry New York, but you are losing out. An old fashioned analogy is someone who corresponds my mail with another party in another country, while performing his work in his country of residence. Computers just make it faster. It is not really any different.
Oh well, what the hell...
It's a totally commpon practice to tax residents of other states, when they are working in your state. Just imagine what professional athletes go through. Or at least their accountants do. A pro athlete has to pay state taxes in EVERY state that he plays games in, that has a state tax.
The basic thrust of this act, and what NY has done, is said that IF you are telecommuting to work, solely for personal reasons, rather than because it's convenient for your company, then you owe taxes in NY. Basically while you may not have physical presence in NY, you do have telepresence.
I don't have a major beef with this. From what I recall reading elsewhere about this, he doesn't even really have strong ties where he's living. He just liked that there wasn't a state tax there at all.
"Politicians are interested in people. Not that this is always a virtue. Fleas are interested in dogs." P.J. O'Rourke
"1. The tax burden shifts from those who work to those who spend."
thus hurting the people in the lowest income levels. Many of those people wither don't need to pay taxes i.e. EXEMPT or low income person who gets most, if not all, of there money back.
"2. You are only taxed on new goods. Sell your used computer, car, house, whatever, without worying about taxes."
The volume of lost tax revenue on home sales alone would intitute a huge amount of maoney you will need to recoup. That for the times you actuall keep the money. If you sell a house, and roll the money immediatly(30 days) into a new purchase, you don't pay taxes. I don't know what the upper limit is.
"3. Every head of household will receive a monthly 'rebate' check from the federal government to reimburse the taxes collected on basic necessities. The closer to the poverty line you are, the larger the check. For instance, a family of four living at the poverty line would receive a monthly check of $497.00, (estimated at the time the Fairtax book was written)."
do you reallt think people making less the 15,000 dollars spend 6000 a year in taxes on 'basic necissities'? or does rent count into this?
"4. Every pay period, you receive your gross wages. No Federal Withholding, no Social Security withholding, no Medicare withholding. Those taxes are paid from the sales tax."
I get taxed about 600 dollars a month, and I have no sales tax in this state. so now they need to get that money back through sales tax. that meand if I am taxed at 10%, I must spend 7200 dollars a monthfor the state to get the same amount of money. FYI I get about 2000 doallrs a year back.
"5. No more April 15th. It's just another spring day.
"
if 4/15 is an issue, then you are just lazy. It's not like it happens on a different time every year!
"6. Outsourcing of jobs and finances will stop as the flow is reversed to what will become the biggest and best tax haven in the world."
ummm why would people buying things in a different country want to come to a country where they would have to pay more in taxes?
The Kruger Dunning explains most post on
"I too support working from a red state that receives substantially more federal funding by not paying taxes to a blue state that receives the least."
Says the hypocrite leftist who ultimately argues against tax cuts for the so-called rich (thereby leaving more money in the generally wealthier blue states; probably is considered "rich" by the incomes tax tables), hates profit making companies (yet lives off of most in the major city and financial districts of blue states which many do have substantial red county rural districts), and is against rascism (but is all talk, seeing those red states particular Gulf States having a heavy black demographic).
Or, are you saying a strong federal government that is slow, ineffective, unfair, and oversteps the Constitution (actually, Bill of Rights, 9th or 10th amendment, I've forgotten which) just plain sucks? Those in the red states agree with you. Thank you for thinking like a hick (I believe that's what some of my now blue state colleagues refer to you as).
You know what, you're right, this is great! Federalism stinks. Everything comes down to dollars, not resources. They (I'm in a blue state apparently) can keep their oil and natural gas (Alaska, Texas, several Gulf Coast states).
And fresh water (water rights act, Colorada River 'basin')--California can just go build more desalination plants. And food (California is the largest food producer in the states, but won't get far without those water rights). And transportation rights (including air travel).
Go down that road. When you're thirsty, the greenback won't buy you squat. You won't have shit to trade. Your economy will be in the shitter. Your morals based on greed and not consideration won't help when everyone else around you is panhandling. And when you come to invade the red states, they'll have the guns to fend you off.
I LIKE your ideas. Tell me more.
Because the US is one of the few countries to tax income earned in another country that has already been taxed by the foreign country.
Not sure why this is modded as flame bait. It's rare to see someone with the balls to tell the truth about USA.
- Hillary in 2008 -
The first $80,000 or so you earn abroad is exempt and isn't subject to SSI or Medicare payroll taxes. And that's before you even touch the usual cornucopia of tax exemptions.
Ever heard of municipal bonds? Ever heard of deductions? How about corporations, charitable trusts? The richest do not pay the most. If the tax rates were flattened, but all the excludsions and deductions were removed, many rich would pay more.
Want some examples? Let's say I have $50 million in my trust fund. I put it all in municipal bonds. I get 5% interest each year, which gives me a livable $2.5 million in income per year. No federal income tax. State tax will only take a few percent. If I put the money in dividend-paying stocks then that money is taxed at 15%, and long-term capital gains is under 30%.
Want another? I still own $50 million, but I own my own company. I work as the CEO, and pay myself $100,000 per year, but the company buys me a house, a car, covers health expenses, and pays my greens fees. That is all tax free. I pay myself a dividend which gets taxed at 15%.
The rich will win no matter what. There is nothing wrong with that. Stop playing the class warfare game and trying to steal their money. At best, you'll take the money away from some stupid upper middle class people.
godot
That shifts the burden of tax from earners to spenders. So it doesn't matter how you earn the money, it's when you spend it you get taxed. Now one benefit is that it is very difficult to shield your money, as the super rich often do. When you are a millionare CEO, you can play all sorts of games so that your income on paper is very low and thus you don't pay much tax. However if tax is paid when your purchase something, there's little you can do.
There are a number of economists that think that this is really the way to go. You exempt essential items from tax (or some say you have people file for refunds to it can be determined if they truly are essential) and then charge a heavy sales tax on everything else.
You are countering the parent's point by denying that the states exact tax on the full 100% of an act's yearly income when the act performs briefly in those states.
That seems logical enough, but only if you meant that it's charged pro rata to time spent in each state instead, otherwise you would be agreeing with the point rather than refuting it.
In contrast, here we have a situation where 75% of the person's time is NOT spent in a particular state, yet the state taxman still wants either the 75% or the full 100%. This makes the parent's analysis a lot more accurate than yours.
Okay, it's not flamebait but it is misleading. The middle and bottom in the US pay significantly more than an equitable share of taxes.
The low 50% of wage earners earn less than 2% of the total income in the US, meaning that the top 50% of earners are not pulling their weight.
More to the point, the top 10% of earners earn _way_ _way_ more than 10% of the income, (I believe it's on the close order of 90% but I can't confirm it) yet pay way less than the correct proportion.
Who, me?
It's a no brainer as far as NY is concerned. They can enact a law the people who live outside of NY will owe taxes on all income that oringinates from within NY.
The companies don't get hurt, it's the employess ( even though there might be some additional burden for local vs. remote employees). Since the companies are in NY, they are compelled to withold taxes.
The out of state employees might not like it, but there isn't squat they can do about it. As long as they reside out of state, they can't vote on any measure or representative that is screwing them. Best they can hope for is organize and send $$ to buy off someone in NY.
This the same as how lots of new public-funded stadiums get built. A popular place to suck exta taxes is from rental car fees. Locals usually vote on it since it means they get a stadium and others have to pay.
Getting votes for taxes that that the voters don't have to pay is pretty easy.
I'm totally confused. I'm a full time telecommuter as a network engineer. I support users mostly east of the Mississippi, but regularly support advanced technologies globally. What constitutes me working remotely in another state? If I hop on a router in our NYC hub, am I supposed to take note of the time spent?
I have teammates in NC, MA, VA, CA, NV, and Ontario... not to mention UK, Netherlands, Japan, Australia, India, Singapore, and China. Should I submit foreign taxes as well when I am on global conference calls?
This is the most idiotic thing I've heard of.
http://www.fuckthesouth.com/
This story really swings me in favor of either abolishing state and federal income tax altogether and replacing it with a national sales tax or aboloshing state and local income taxes in favor of having the federal government have one income tax and be done with it, preferably one where every person is taxed at an equal rate.
I bet if they were to institute a national sales tax and get rid of the income tax, they'd have as much money if not more because people will buy more things and as a consequence pay more taxes on those goods. I know I for one can think of plenty of ways I'd like to use the money that is taken out for income taxes.
"The boy is dangerous, they all sense it, why can't you?"
Taxing peoples' income twice clearly restricts interstate commerce. It is an incentive to live in the state in which business is conducted, rather than conducting business remotely; an outdated practice for our time.
Because it is a restriction, and ultimately serves the same function as a tariff -- and since tariffs between states are illegal, by Constitutional definition (Sec. 9, Clause 5) -- it would seem to me that this double-taxation ought to be illegal too. The NY Appeals court saw things differently.
This seems like something the ICC should take up, and as an interstate case, it's necessarily a federal case. Where's the reasoning for the USSC's refusal to hear the case? This is right up their alley...
Is Capitalism Good for the Poor?
I know that you're just stating facts (except for the 'pulling their weight comment'), but the way you present them leads one (at least me) to understand that the top earners don't pay enough taxes.
So, you're saying that if I am the top earner in the country (top 100% 'bracket') (I wish, watch yourself Bill!), then I should give all (100%) my money to taxes? Would that be the 'correct proportion' that you speak of? Or do you mean that I should pay for 100% of the taxes collected in total?
This really is nothing new. I live in one state and commute to another for work. I pay taxes in both states, however, one state (NY, where I live) gives you 100% credit for taxes paid in another.
State income tax is strange. The laws are--well like if you live in california for two weeks and work as a waiter and then you move to washington where there is no tax and work as a CEO for the rest of the year, california gets full tax of your CEO job.
But if washington had a tax, they split it based on how long/how much money you made in one place or the other.
That's what it looked like to me. I don't understand this logic. I am taxed, by the IRS, at 36%, our top bracket. And yet, someone making only 40K or so will only be taxed at 15%, but most often even less after deductions which are much larger percentage at the lower wage levels. So, the real question is: Why is it fair that I pay a much larger portion of my wages than someone making less than me? A perfect case for a flat tax in the US. Not to mention that although I pay into all these programs, none of them are available to me, like tuition assistance. Why is it based on income rather than strictly merit? Why do I fund the program much more than those that actually get to use the money?
I am a consultant with one of the big four audit firms, and each week I submit billable hours by state and city. Last year I spent 150 nights in hotels, and for any state where I worked over 40 hours I had to pay income tax. Aside from inflating my H&R block bill, I think the system is fair. I get a tax credit in NY (my home state) for the hours I don't work here, and pay those taxes (often at lower tax levels) in the states I travel to.
O.K. this is just plain offensive.
... NO! if this was the case just about every construction worker in the country would owe taxes to some foreign state.
...
Lets have a look at this from a meat space point of view:
If I live in Tennessee and am hired by a New York company to build a storage unit in Tennessee, am I expected to pay New York state income tax because the company that is paying me is in New York?
Well o.k. maybe the argument could be made that the telecommuter's work is actually being put to use in New York
If I live in Tennessee and am hired by a New York company to build modules in Tennessee that will be transported to and installed in a new building being built in New York, am I expected to pay New York state income tax?
How about if I'm required to attend a safety meeting once a month in New York? am I then required to pay New York income tax?
Basically this whole taxation of out of state workers that perform work out of state sounds like complete bullshit to me.
If I am in state x performing work in state x it shouldn't matter where paying company y is. I owe taxes in state x not whatever state company y may have a presence in.
Reminds me of how flustered multinational corporations and banks get when anyones hints of (t.a.x.i.n.g.) the money they send away overseas.
Or of how they filled armored cars with US$ banknotes and physically airlifted them en masse out of Argentina, back when the US$ - Peso parity finally collapsed.
If the rule of law prevailed, West Virginia's government would be disbanded and all assets and governence returned to Virginia.
i nia#Issue_of_secession_causes_major_split.3B_new_s tate_created
WV is not a legal state as recognized by the US Constitution. They formed without consent of the state of Virginia thus they are not a legal entity.
Don't believe me? Check it: http://en.wikipedia.org/wiki/History_of_West_Virg
I've always wanted to go speeding through the state in my car, get a ticket, and then appeal it on the basis that the state is unlawful and based on the US Constitution doesn't really exist. Somehow though I think someone has already tried that.
Libertas in infinitum
Uh... if you're claiming that "deducting taxes paid to one state" will somehow cancel out your taxable income in another state, then I have to call bullshit. Deductions don't work that way. Taxes paid to other entities (federal, state) get subtracted from your taxable income, NOT from your taxes owed.
For example, when you deduct Federal Taxes paid from your state income tax return, you end up with less taxable income, but it's certainly not "canceled out." Example: Salary = $75,000. IRS taxes = $20,000. State taxable income = $75,000 - $20,000 = $55,000. State tax rate = 5%. State taxes owed = $55,000 * 0.05 = $2750.
Unless your state has specific exemptions for "income taxes paid to other states" or some kind of reciprocal tax agreement, you must file returns in both states. I did this for several years as a grad student in North Carolina with residence declared elsewhere. Since I made almost no money, my liability was low, but I did end up paying money to two states.
I think it's fair to say that the readership here is more liberal than not, so I want you remind our gentle readers to not ever complain about paying more taxes. Paying ever more taxes is the central and highest ideal of liberal philosophy. You will no longer be considered "cool" and regarded as in good standing amongst your bretheren if you ever suggest paying more taxes is a bad thing.
Why do you even need money at all? If only we would let the government take all of our money we would all be well cared for from cradle to grave, equally, with no worries whatsoever.
Do not speak ill of higher taxes, do not think of the things you will have to do without when you must make due with less. Think only of the wonderful utopian society that is being created by the government bureaucracy when they spend your money with their trademark high efficiency and good intentions. See the world of 'THX-1138' for inspiration.
http://www.imdb.com/title/tt0066434/
1) NY Company outsources programming work to India through a third party company, programmer does all work in India and his finished product is shipped back to NY Company.
2) Same scenario as above except that he works remotely on company's servers.
3) NY Company hires Indian dude to work for them directly and he telecommutes.
Now I reckon based on this story that New York would argue that in scenario 3 Indian dude would owe NY state taxes (The conversion rate is favorable, I wonder if they'd end up owing HIM money...) They might make an argument that he owes them money in 2, but how about 1?
Now lets say hypothetically option 1 avoids the NY taxes, then all you really have to do is work through a consulting company that has the computing resources locally and only ship the final product of your work to your employer. At some point can the New York AG office decide that this is a tax avoidance scheme and start going after people who work remotely this way? After all, ultimately a New York company is benefiting from your work and paying for your services. You're just using a clever loophole to get around being taxed in the state. And if this is the case, what implications does it have for multinational corporations and corporations that make heavy use of outsourcing and are also located in New York?
Kinda reminds me of a while back when Florida decided that IBM should pay taxes on its entire income, not just on the business it does in Florida. Rumor has it the plan was quickly abandoned after IBM threatened to completely pull out of Florida...
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Off-shoring would most likely be service contracts to external corps, not employment contracts to individuals, so no US income tax would be involved. Instead, you might have a mess sorting out the "sales" or "value added" taxes for multiple countries, but in general I think big companies have already lobbied as necessary to smooth this process for international trade. The accountants get their share though...
Ironically, the situation for US expats is that the US IRS claims your worldwide income is taxable even if you never set foot in the US in the tax year. At least there are dual-taxation treaties with most countries, so we end up owing max(US fed, country of residence) taxes and not sum(US fed, country of residence) taxes. As long as we still get a foreign exclusion, we can deduct a big chunk of our gross earnings and pay tax only on the extra, but this deduction is prorated by our annual work presence, e.g. if we lived overseas and made business trips to the US 25% of our workdays, we'd only be able to claim 75% of the foreign exclusion.
My guess is that any resolution of this US state tax issue will be similar. Rather than doing the obvious thing of prorating your annual work presence in each state and paying prorated fractional taxes to each state, you'll probably end up paying max(states where work is performed) and there will be some crazy system by which the states divide up the spoils. At best, I'd hope for federally standardized rules about exclusions and minimum work presence to prevent states from pestering you for very low percentage presence...
I always here this. I never see any proof. In fact, most public officials have to put their tax returns into public view. Guess what - the rich ones pay through the @$$.
If you actually bothered to read the tax code, you would note that virtually all loopholes and exemptions particularly do NOT apply to the rich. They phase out after a certain amount.
Of course, this is just an argument for a simpler tax system. Right now, it is impossible to know how much anyone is paying, and therefore impossible to argue that any person's tax should be higher or lower.
Taxation should occur where the keys are typed, because that's the only work performed by the employee.
The server farm is not subject to income tax, no matter how much compilation it does.
no one has talked about whether this guy is 1099 or W-2 employee. i think it makes a big difference (in respect to tax law).
Works as in mostly functions most of the time for for most people. No governemnt of 300M people can make everyone happy. It certainly doesn't make me happy. If all you can do is find individual cases that don't work, whoopee. Big Deal. If you can make up a practical working government which works for more people more of the time, go for it, and I will find individual cases which don't work.
... but it still works better for most people than a race car in perfect condition.
The government may be like a car which has seen better days, maybe it has a notchy shifter, tires need replacement, trunk doesn't always latch close without a big slam, creaks and rattles, a window makes too much noise
Libertarians would throw out the clunker and start from scratch. That only works in silly novels. Realists would fix the car up piece by piece.
Infuriate left and right
I recently moved from to NC, but still work for a company in MA where I've been a full-time employee for a few years now. Both states have a tax and this is what I found out a few weeks ago. I work at home everyday save maybe 12 days a year. Taxes are withheld for the State of MA from my check every pay period (5.95%) No taxes are withheld for NC (7-8%) I will get a small refund from MA and the remaining amount that MA keeps can be deducted from the amount I will have to pay to NC for never having given them any money all year. It sucks, but it's the law
And you probably dont make use of your IRA deduction.
I make low six figures and this was my problem, until I spoke with a professional.
Step one, start contributing to your ira, if you dont have an IRA you are giving money away. Between you and your wife (oh wait this is slash dot) you can take 1,500 direcly off the bottom line of your taxes.
Next, go buy a house, find the largest house you can afford, then get the next one up. Put it on an interest only loan. IIRC, then you can write your entire house payment off (if your house is big and nice enough). This one is good for about 15k off the bottom line of your tax bill. (if you are in the low 6 figure like i am, more and you can write more off)
Finally, start a small business(make and sell crafts at the local craft fair). Take a room in your new nice big house, and call it your office. Keep track of every penny you spend on your business, and take a loss for the first three years. This should put you down to ZERO taxes (even a credit for next year!!!) for the next few years.
You are waisting your money if you make more than about 80k and pay more than 5-10% in taxes. (hint, you should only be paying property taxes, any more than that, and your house isn't big enough)
If those who needed the money could fund the program, THEY WOULD NOT NEED IT. If 36% is too much to ask, maybe you should go get a job making the same amount somewhere with lower taxes.
Perhaps you all in the US should kick around the concept of no taxation without representation a bit further. It might have legs.
all the best,
drew
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http://www.ourmedia.org/node/85937
Tings - my nanowrimo 2005 novel under a BY-SA license
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FreeMusicPush If you want to see more Free Music made, listen to Free
There's just not a chance that IT people who are telecommuting are going to get the shaft. If you have your doubts, go read the verbage in the Federal overtime laws. IT is specifically exempted from them.
It's Federally encouraged to keep your IT staff as wage slaves.
But, that's just how I see it. Your mileage may vary.
Awk! Pieces of eight. Pieces of eight. Pieces of seven... ERROR: General Protection Fault. [Paroty Error.]
So you're saying you don't have a significant amount of deductions?
Don't forget that the person making 40K is also going to have to pay 10-15% of their income for social security and medicare/medicaid. You'll, depending on how much you make, will max out your social security contribution (7.5% I believe but not positive) and from that point on your relative tax rate will go down the more you make.
Also don't forget that someone who is firmly located in that top bracket is also usually earning some sort of income from investments which are taxed at a MUCH lower rate (15%) due to capital gains.
I personally believe that the tax system should be based partially on consumption (which overwhelmingly screws poor people who have a higher propensity to spend) and partially on ability to pay (which screws the wealthy people who have more money/toys/things/crap than they know what to do with). We do after all have the lowest tax rates of any industrialized countries.
As for your comment "why is it based on income rather than strictly merit?" I have absolutely no idea what you're trying to say with that statement. How do you measure merit? earning potential or actual earnings? Or do you measure intelligence, or wit, or charisma? I'm confused, please enlighten me.
So, the real question is: Why is it fair that I pay a much larger portion of my wages than someone making less than me?
I'm not going to say it is or isn't fair, but there is a case to be made for the fact that when you're making such a dramatic amount more than your fellows, it's not because you were doing such a dramatic amount more work, it's because you managed to get a setup going where you're being paid for other peoples work, and you're getting a higher return on the infrastructure than others because you've got all your underlings using it to make you money. As in, I'm only using and relying on the infrastructure for my own use, but Bill Gates is using and relying on the infrastructure for the many thousands of people who work daily to earn him his money. It's not as cut and dried as that in most peoples cases, but the fundamental principle is the same. You pay more because, at the end of the day, it doesn't matter fair or not, if control over the wealth is concentrated in a few hands, those few hands are going to have to feed the machine that gives them that wealth whatever it needs or they won't continue to have it.
-1 Uncomfortable Truth
PS: I'm a populist libertarian.
That's like saying you're a liberal conservative. Populism and libertarianism are traditionally seen as opposite poles on a two-axis political scale, same way liberal and conservative are the poles of the other axis of that scale.
I think the term you're looking for is "moderate".
(Or maybe you meant you're a libertarian leaning toward the populist side of libertarianism, i.e. a moderate libertarian? Same way a "liberal conservative" might mean a moderate conservative).
-Forrest Cameranesi, Geek of all Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
Move all the computers in NY to Tennesee! Presto, not only do you save on taxes, but now all your cow-orkers do too.
I can explanate how to administrate your network. You must configurate and segmentate it, so it can computate.
I am a french citizen and live in germany. I pay german income tax not the french one... Heck I would like to pay the french income tax (less than the one in germany). But as far as understood since I have to pay income tax at the place where I live and have my "primary" residence declared.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
So, the real question is: Why is it fair that I pay a much larger portion of my wages than someone making less than me?
Go read up on John Rawl's and The Veil of Ignorance. The basic idea is that before you are born, you don't know if you will be born as the gifted child of a wealthy family or a mentally handicapped child of a poor family. What tax system would you choose for the society you will live in before you discover the actual alternative into which you are born? Is it fair to newborn children that some are born into wealthy families and others into poor families or that some are born with great talent and others with physical or mental handicaps? To me, a fair tax system is one that balances incentives to work hard and grow the economy with the moral understanding that people don't all start out equally.
FreeSpeech.org
Why do we tax wages at all?
... retarding sprawl. Shorter commutes for workers. Less fuel used. Less time. Less pollution.
... like the blue pain reliever pill, it works for them!
Our wages should be ours to keep. It is part of owning oneself.
There is a much better tax base. It can't go off shore, or hide behind paperwork. None of us can produce any more of it, no matter how high demand gets. What is it? LAND! As Will Rogers put it, they aren't making any more of it.
Since none of us made it, none of us is more entitled to its economic value than the next guy. So it is the perfect tax base. Tax the annual value of land, and good things happen. You haven't stolen anyone's creation (as you would by taxing wages.) You haven't distorted the demand for a product someone has made (as you do with a sales tax or a tariff). You haven't punished someone who has produced something (a house, a factory, jobs for others, for example). All you've done is collect from all the landholders something they didn't create and shouldn't be able to privatize. And you haven't disturbed title to property at all.
Better yet, the underused downtown land will get put to better use, as lazy speculators are inspired to stop waiting for their land to "ripen." They'll be motivated to lower their asking price, or put that choice location to good use themselves.
And when a downtown acre gets developed, 10 or more acres on the fringes get protected from premature development
And when you tax land values, you bring down the price of the land, making it affordable to those who need it. Our children will be able to afford a place to live -- not spend their adult years in their parents' homes. Firemen and teachers and nurses and janitors will be able to afford a place to live, and they won't spend their lives commuting.
How do we do this again? Just tax land value. Collect for the community the value that is made by the presence of the community.
Why tax commuters? Tax those who own the land they commute to! They're the big beneficiaries of everything we do today, and they aren't about to speak up and complain about this state of affairs
Today, we tax the landholder lightly, then tax the worker and the consumer in order to fund the very spending which drives up property values, so that the landlord can charge his tenant more next year, and the seller can ask a higher price for his property next year. No wonder we have problems! No wonder a few are getting rich and the rest of us are paying twice -- once to the landlord (or the mortgage lender) and once to the government.
Wise up, America!
...sort of. For example, if the state of california insists on charging you income tax for work performed as a Tennessee telecommuter, you should be eligible for the California renter's credit for the apartment you live in, also in Tennessee.
Look around, there are probably a few other adjustments. Maybe you can get non-polluting vehicle credit for the car you aren't driving in your work state.
Do I earn the income where I physically am, while I do the work? Or, do I earn the income where the employer has a place of business?
Imagine I come to work every day in the phone support department, here in Tennessee. Should I pay income tax to Alaska if a customer calls from that state about a broken widget? how about if I'm a salesman calling all over the southeast?
His comment is not "You're in the 100th percentile so you should pay 100% of your income as taxes," and to construe it as such is misleading. He was saying that if YOUR BRACKET controls 10% of the money then YOUR BRACKET should pay 10% of the taxes.
The point of taxes, despite what Repbublicans want you to think, is not to let the government spend it on the same things you would (tuition in your example), it is to let the government spend it on things for the greater good. What the greater good is is up for debate but don't pretend that if you pay 5000$ in taxes you should get 5000$ of direct benefit.
Further, those higher up the income bracket SHOULD pay a higher rate of taxes. This is a progressive, civilized concept, and if noblesse oblige weren't dead this wouldn't be debated. It's called "helping your fellow Americans, especially those worse off than you." However, as it is this is the opposite of what happens, with those less able to afford it paying MORE of the burden. Stop complaining.
Nicotine free Amish .sig.
Theory makes no provision for unrestrained people forming monopolies and cartels and gangs and other non-individual groupings. Soon as you have those, you no longer have a free market. Duh!
Yeh I love these idealists. So practical. Now you know why that original poster said he hates libertarians.
Sometimes you gotta choose. You can have 0% of an ideal or some percentage >0 of less than ideal. Libertarians haven't got a lick of common sense when they talk about throwing out government altogether and think that a completely free society will result. Not an ounce of brains among the whole lot.
Infuriate left and right
Do you really want to live in a place where if your house is burning, you can't call the fire department unless you've got the $2K to pay for the service? Suppose your neighbor's house is burning, and he can't pay the fee. Is the whole block going to go because of that?
Next suppose the average low-income family can't afford the busing fees (or road charges) and high school prices to send their kid to school.
Does this still sound like a good idea to you?
Suppose you can't call the police (sorry, private security service) when your house is robbed and your daughter raped because, golly, they took all your money, and the cost of arresting the guy and housing him in prison is *way* out of your price range even before the robbery. Actually, your best bet is to just try to hire a hitman to kill the guy, because he probably can't afford to jail you, either.
Golly, sign me up.
Seriously, government does not always run smoothly or efficiently, but I'm not hearing anything helpful at all in what you're saying.
Red Flayer, you are so misinformeed. So too are the mods who modded you up.
Lets recap eh?
Top 5% of wage earners pay 54.36% in taxes.
Top 10% of wage earners pay 65.84% in taxes.
Top 50% of wage earners pay 96.54% in taxes.
And for proof, check out the excel file from the IRS website. This data is collected from 1985 through 2003. Do the math. http://www.irs.gov/pub/irs-soi/03in05tr.xls
Honestly, the economic ignorance that is abound just pisses me off. Its bad enough science and engineering are plummeting in America. But if we slack off in Econ 101, we are in some serious shit!
Life is not for the lazy.
Yes, in theory the current system is more "progressive", but in actuality people in the top brackets rarely pay anything close to that amount. Why? They can afford to game the system, and the people on the bottom can't.
The only way to make it fair is to make it simple.
At that point, if we think we need additional assistance programs we can write 'em a check out of the billions we'd save over administering the current impossibly bloated system.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
He would have to pay taxes in NY even if he lives in India.
The great majority of the opinons that I read go completely against the logic of modern tax policies. At an international level, there are many bilateral treaties to avoid double taxation. That's the technical term here, not an "opinion"; I read below about this being double or not double, double taxation is the correct technical term for this situation.
Double taxation usually creates a lot of friction for commerce and is generally considered unreasonable in modern international tax policy, specially when the two countries involved have somwhat similar personal income taxes.
Double taxation agreements are considered a precedent of a rise in commerce between two countries. So yes, there is evidence that it is a problem for commerce.
The only cases where international double taxation agreements have problems is when one of the countries is a tax haven (there are usually no double taxation treaties with such countries). That situation might complicate matters here in the US because of the tax differences between the different states.
In the future, I see that it would be very natural for states to start signing these agreements, specially when the both of them have comparable income taxes. This would eliminate the nighmare scenarios at least.
It is reasonable to take international double taxation as a precedent, since it deals with a lot of similar issues.
>There is no worse tyranny than to force a man to pay for what
>he does not want merely because you think it does him good
E.g. the gov't mandates that all cars must have seatbelts installed for every seat. That makes the car circa 100 USD more expensive to build and buy and it hurts the consumer's pocket. Most consumers do not want seatbelts, it is a really annoying harness and does not look cool at all. It is thus very tyrannic to mandate seatbelts...
With this kind of reasoning the only award you will win is the Darwin Award, like Derek Kieper, that bachelor guy who wrote a lenghty tirade against seatbelt use in the university weekly and managed to eliminate himself from the human genome a few weeks later in an otherwise very minor car accident when he was thrown out the windshield. See: http://www.snopes.com/autos/accident/seatbelt.asp
So how much does everyone owe Russia?
And to be frank you weren't much use in the first war, took your sweet time turning up in the second and have shown you don't know how to pick your own ones very well.
But hey, who's counting...
DC isn't a State.
Best Slashdot Co
Try the Fair Tax Plan www.fairtax.org. It is currently a bill in congress. Write your congressmen!!
A closed mouth gathers no foot.
Your residence (in most countries) mandates where you pay income tax.
Being a Londoner you will be familiar with the name Mohamed Al Fayed. He moved to Switzerland in order to save taxes, in spite of making more of his bussiness in the UK.
The problem is tha in the US each state is basically an entity on its own right and many things can't be regulated in a sane way at a federal level.
IANAL but write like a drunk one.
First off, let me say that your figures don't even apply to what is being discussed -- individual tax rate cannot be extrapolated from % total tax burden by income class.
Second, your figures (and yes, I'm familiar with the IRS figures that you linked to, but I checked them just to be sure) do not include state and local taxes. Nor do they reflect true gross income -- instead they are AGI, adjusted gross income.
Lower-income people pay a much, much higher proportion of their income in state & local taxes than the wealthy.
You can cherry-pick statistics to your heart's content, but that's a reflection of your poor analysis, not any economic misunderstanding on my part.
What really pisses me off is people who think that federal income tax is the only tax that people pay, and don't even bother to read the part of a post that talks about total tax burden. Nor do they bother to understand that AGI reported to the IRS is different than true GI.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Lower-income people pay a much, much higher proportion of their income in state & local taxes than the wealthy.
No, they don't. The lower income earners pay the same if not less of a proportion. That is because of state tax breaks when it comes time to file. The "rich" on the other hand spend more at the local level such as higher property taxes. Sales tax being the same proportion for all income clases.
You can cherry-pick statistics to your heart's content, but that's a reflection of your poor analysis, not any economic misunderstanding on my part.
Sounds like you have the classic case of class envy. But go ahead, tax the "rich" to oblivion. The more you punish the wealthy in this country, the more they will move their assets to another country. Less wealth to tax on means less benifits for the "poor". Wealth redistribution does not work. It back fires. It always has and always will on any country that invokes socialism. That's correct. Our tax system is a form of socialism in the mildest form. Nothing fair about.
Life is not for the lazy.
"No, they don't. The lower income earners pay the same if not less of a proportion. That is because of state tax breaks when it comes time to file. The "rich" on the other hand spend more at the local level such as higher property taxes. Sales tax being the same proportion for all income clases."
Umm, no. Analyze property tax vs. income level, and you'll find that the poor pay a higher proportion of their income on property tax than the rich -- keeping in mind that a proportion of rent is property tax. We're talking proportion, not absolute amounts here. If you want anecdotal evidence, just check out property tax rates vs. median incomes for a few municipalities... you'll quickly find that property tax rates are much lower in high-income areas, while there is a positive correlation between property values and income. Therefore, there is a inverse correlation between income level and property tax paid. If you want evidence that is better than anecdotal, google for some, since it is obvious you are good at using google to pull statistics, however irrelevant, out of a hat to support your points.
"Wealth redistribution does not work. It back fires. It always has and always will on any country that invokes socialism. That's correct. Our tax system is a form of socialism in the mildest form. Nothing fair about."
What are the criteria by which you judge success or failure of a system? This generalization is a bunch of BS, since it is obvious that socialized medicine is working well in many nations...
If you believe the role of government is to stimulate maximal economic growth, then you may be correct. But socialized medicine works well in many countries... in fact, the per capita cost of health care is lower in socialized countries than it is in the US... even when you only include countries with medical systems comparable to ours.
At any rate, your blatant generalizations that mean nothing, and that are not arguable since there are no criteria, just go to show that you don't have a good idea of what you are talking about. You may be able to google for some facts and figures, but you're obviously missing the boat.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
Two points to consider: First, there is a difference between what is 'Fair' and what is 'Just'. The current tax system was originally designed to attempt to introduce a modicum of justice into what an economic system that is, at its core, very darwinian and therfore very unjust. 'Fair' just means everybody contributes the same amount to supports the system, regardless of the extent to which they have reaped advantages from the system. 'Justice' means equalizing the contribution to maintaining the system with the extent one has reaped its advantages. Nothing is ever really fair or just; we can only approximate either one, and they are often contradictory concepts. And don't mistake this for socialist thinking, because the concept of justice has been tossed around by pholosophers and religious scholars for about 3,000 years. An absolutely just system would ask that everyone's contribution to supporting the system be in direct proportion to the advantages they have reaped. Thus, in an above example, those who make up the 2% of our population that collect 50% of the income (and own like 65% of all wealth), would contribute 50% of what it takes to keep the system running - the government. In the same way, that 50% of the population that generates 20% of the income would be asked to contribute 20% toward maintaining the system. Such a system, while absolutely Just, is politically untenable in a oligarchic democracy such as ours. In purely economic terms, a strictly 'Fair' system is as impossible as a strictly 'Just' one. Were everyone to contribute say, 30% of their consumption, the bottom 50% of wage earners would be taxed on 100%+ of their income, while the top 2% would be based on maybe 5-10% of their income (what they actually spend in a year vs. what they make). This throws the weight of supporting the sytems onto the backs of those who have reaped its advantages the least; and it allows those who have profited most to invest proporitonally less. And those who believe we could rid ourselves of the IRS by simplifyiing the system are fooling themselves. In a darwinian systems such as ours, and given human nature, enforcement of the tax code -- whatever it is -- will always be necessary. So the choice is really between a range of fairness vs. a range of justice, with no perfection attainable. One last question: Everyone I hear speak in favor of 'fairness' are comfortably in the middle class, if not among the nouveau riche. I wonder if fairness would sound so good to them if they were making minimum wage and trying to support their family on that?
Maybe you have more to lose then someone making much less?
Rich people pay for the stability to keep on making money and securing their wealth. If the economy tanks, the people on the bottom are out 40k and year if they lose their jobs and the people at the top are out 150k and up. And the even poorer people have less to lose by instability.
But really you aren't even accounting for all the taxes, you are just chosing personal income tax so it looks like you have something to gripe about.
Wait, so the top 50% already shoulder 96% of the country's tax burden, and you think they should pay even more just because they have more than, presumably, you? What a load of jealous / selfish crap. I'm in that upper 50% myself, mostly because I've got a piece of crap contracting job where I get no benefits, but instead get paid enough to make a decent single-income family living and pay for all of my "benefits" (like health insurance, etc) out-of-pocket. Sure, the government puts me in the top 50% of wage earners, and I'm not living in the poor house, but I can guarantee you that it's not a life of luxery and servants, where there's money to burn. After bills are paid and gas 'n groceries are bought, I've got like $30. Party time! I'm sure that the poor of this country are thinking that it'd be great to have an extra $75 per month and to drive my three year old Grand Am (purchased used this year, not yet paid for) which gets parked outside of my 800 square foot house (if you include the basement as living area) which I rent right next door to a gas station, but you can kiss my ass if you think that the "rich folks" like me oughtta pay even more damned taxes to "pull my weight" based exclusively on my gross income level. Yeah, this is the life, driving a $15K used car and living in a rental house. Who could ask for anything more?
The government already takes from me more than a minimum wage worker would earn in a year - and you know what? I don't think the government is working at a quality level where they *deserve* that wage. The solution isn't to take even more from me, it's to get our asinine government to either take care of the people that it's crippling with excessive taxation (people that make <$20-$25K/year, IMHO) or to quit crippling those people because their contribution is so small as to be insignificant anyway. What, the government can't find a way to cut spending by the 1-2% they'd miss by giving the poor a tax cut?
On the one hand, yes I do think that since the top 50% earn _more_ than 96% or the income, they should shoulder more than 96% of the burden.
Stay with me though, because we're really much closer on this than it appears. My real issue isn't with the 50-90 percentile people like you and me. I'm employed in the software industry in the San Francisco Bay Area, also single-income family. It feels like you and I are fairly close together in terms of income left over after expenses.
You and I in the middle probably (and I haven't seen the numbers so I am speculating here) are paying more than our proportion of the burden while the low-end is paying less (and that's appropriate in my opinion) while the top 2-5% are also paying much less than their equitable proportion, especially given the tax cuts that the Bush Administration want's to make permanent (at a cost of about $70 Billion / year).
Extremes are where the problems are in my opinion. The low end is just plain getting screwed (Congress recently cut $30 Billion from MedicAid) while the top end is skating by. Do I want my taxes lower? Sure! Not at the cost of destabilizing society by making it increasingly impossible for the low end to survive, let alone improve their situation.
Who, me?
You cannot be taxed twice on the same income. Every state has a tax credit for income taxes paid to other states, which ends up being like you were paying taxes to the state with the highest rate.
As to the "top 2% would be based on maybe 5-10% of their income", money isn't much good if not spent, and they don't tend to leave it sitting around in matresses either. So more of those unspent dollars are either in banks (which make loans) or stocks/bonds (which create jobs). That's okay with me.
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
You seem to indicate that taxes from one state are a deduction from your taxable income in another state. So if each of two states taxes 10% of your income, you pay 19% of your income in state income taxes (10% + 10% of 90%). That is nearly double.
The other option is for it to be a tax credit (which is the way it works with sales/use tax, BTW, though IANAL). In other words, any sales tax I pay to other states is a credit against any use taxes I owe. This means that if my state has a 3% sales tax, and I purchase $100 worth of goods at 6% sales tax in another state, and $200 at no sales tax in a third state, I owe $3 in use tax. If income tax is handled in the same way, then you get to pay only 10% (10% + 10% - 10%).
Tax terminology is confusing, and once again IANAL...
LedgerSMB: Open source Accounting/ERP
...and how about the routers it jumps through? Any squid caches anyplace? It's silly, hope he fights it hard, I would.
It gets complicated unless you restrict it to where the human is located. That should be the criteria. Unfortunately, this would then apply to sales taxes,where you are sitting when you click "buy" determines where the taxes go, but I think it's a small price to pay to get it straightened out. The ruling was hideously counter intutitive and bogus. If it sticks hard, I can see many companies relocating to no income tax states and being done with it. heck, incorporate, have one token sysadmin employee there to run all the machines and do the rest remotely.. Frankly, IMO, NY and California are losing their luster in the informaton world. There's little benefit for companies anymore when your primary product is data, and the rest of the nation has (more or less generally speaking) much cheaper places to live for the workers. For what folks pay for a modest townhouse in California you can get a whopper house sitting on acres of nice land over here in Georgia, and have enough left over for new cars and a skiboat....whatever. And not have to live totally remote. Good way for companies to cut costs bigtime withoput going all the way overseas, just move to a "flyover" state and get away from the coastal axis of uber cost of living areas..
If you work in the city of Lansing, you have to pay them income tax.
:-/
:-)
If you live in the city of Lansing, you have to pay them another income tax.
If you live and work in Lansing, you get slammed twice.
Yet, after paying all these taxes to the city, you rarely get any of it back.
You usually either break even or owe them more..
I'm glad I moved away from there...
DEAD DEAD DEAD DELETE ME
Instinctively, I want to agree with you. I really do. But then those making more than me see my comment and feel the same way *I* feel when someone living on the street comments about "all the money" I make. Well, maybe - something like that. I'd like to see a flat tax as much as the next guy, but there have to be loopholes explicitly delimiting any exceptions - and those loopholes are right there for the wealthiest to exploit - which is probably a big reason that the uberrich don't pay ubertaxes. It'd be difficult to ammass a huge fortune without knowing how to game the system, IMHO. Quite honestly, I don't see the problem with just bumping up the minimum income one needs to make to be subjected to taxes. It'd cost almost nothing and would help out a big chunk of the poor. Unfortunately, those people also don't get out and vote, and they dont' have much to make contributions with - so the elected officials only care in as much as they have to put on a little bit of a show for the "rest" of the population.
:(
Oh, and for the record, those tax cuts are a crock of shit. I'm not big on slamming Bush for everything that goes wrong here and abroad - but that's just stupid. I know I'm personally gonna have to repay a chunk of that loan the gov't took out on the future (they sure didn't cut spending as much as income), and it pisses me off. But I guess "Horay for a few hundred dollars that was mine to begin with".
No one works under me and I didn't land a sweet deal in the infrastructure. I educated myself since my parents could afford college (and their religion all but forbade me from going). I worked hard and now I make a living wage. I have enough money to pay for rent, utilities and a few nicities on occasion. Yet, I have to pay taxes to things that I don't have access to (as the previous poster pointed out).
The existing tax structure in the US appears farsical.
Get a life, not a lifestyle. - Hikem Bey
Incorporate overseas. Outsource yourself.
Sorry, that should have said "could not afford college..."
Get a life, not a lifestyle. - Hikem Bey
But on the other hand, you are making the wrong comparison. If you believe taxation should be based on income rather than spending, that is a good philosophical debate. However, trying to conflate the two just confuses the matter.
The poor are taxed LESS of their spending than the rich. They are taxed LESS of their income than the rich. They are required to put in a larger fraction into FICA but they still get a much better deal than the rich (the rich actually subsidize them).
Is the federal income tax unfair to the poor? Hardly
Are state sales and income taxes unfair to the poor? Generally no
Is FICA unfair to the poor? Assuredly not
Yet you are trying to argue that the sum of these is somehow unfair.
Right..., and I wouldn't have my job if I hadn't worn my Brooks Brothers shirt to the interview or signed the contract with my Sheaffer pen, so... I should be paying for the utilities used by the people who made them, in both New York and Iowa?
-rozzin.
The poor spend more of their income than the rich. Therefore, taxing consumption will hit them more than taxing income. My whole point is that you are trying to mix the two into one argument and producing something nearly meaningless.
Sales taxes are typically "regressive" relative to income, but not relative to spending, where they are either flat or progressive (because food is often exempted, though it depends on your state). Comparing sales tax to income is rather meaningless. If a sales tax is fair, it is based on the idea of taxation on consumption, and has nothing to do with income. You are comparing apples and oranges.
If you want to tackle truly regressive taxes, start with the sin taxes. They are terrible for the poor.