How Quickly will State and Local Income Taxes go up?

[Flopper]

who told you state income taxes were a % of federal taxes?

Most State taxes use the federal adjusted income to calculate their taxes, with higher personal deductions it will reduce the federal adjusted income, hence lowering State taxes. It's a simple concept.


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with higher personal deductions it will reduce the federal adjusted income,

Nah, adjusted gross income is before personal deductions are taken out.
No impact on state taxes.

You're right, adjusted gross income does not include personal exemptions or deductions. The new tax law eliminates personal exemptions and sets a higher standard deduction and lower tax rates. That will have no impact on adjusted gross income. So taxes based on adjusted gross income will not be effected.

Large families, say with 6 dependents are going to loose over $25,000 in exemptions under the new law. They will of course get a standard deduction of $24,000 but if they had a large mortgage which seems likely, they are going to pay more taxes. Of course, who ever said taxes were fair. It all depends on who writes the tax code. Today it's republicans. Tomorrow it will be democrats.

Actually they'll pay less, interest on existing mortgages is exempt and can be deducted, interest on new mortgages can be deducted on mortgages up to 750K. Unless you live in some areas of NY or CA the average family won't have a mortgage exceeding 750K. Median home prices is about 415K.


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Good point. Hope that's the case.

 

[william the wie]

That won't be true for long. Jobs are going to migrate to where the bosses save the most on their taxes. The big bosses can afford and use a capital loss on the sale of their house, most of the lesser bosses will be hurt and the lower income workers will neither be able to sell their existing house nor swing a down payment where they can keep their existing job. Seeing a lot of corrupt state and local politicians go to jail will be little comfort.

 

[mikegriffith1]

Well, hopefully those folks who move from high-tax states will remember why they left those high-tax states and will vote accordingly. In some cases, Dems leave high-tax states but keep voting Democratic.

 

[edthecynic]

How Quickly will State and Local Income Taxes go up?

As fast as Trump Gas prices are going up!!!

The national average on Friday was $2.65, compared with a year ago, the average U.S. motorist was paying $2.31 a gallon.
Kiss your tax cut goodbye while paying for Trump Gas.

 

[william the wie]

Well, hopefully those folks who move from high-tax states will remember why they left those high-tax states and will vote accordingly. In some cases, Dems leave high-tax states but keep voting Democratic.

They won't in the future, generally speaking, because they are discrediting their own positions.

There are multiple crises going on and they are feeding on each other.

Underfunded liabilities. State pensions and benefits can only be sustained if the pensioners retain state residence. If lifetime residency is needed to get the state job then the state jobs become much less desirable.

bonded state and local debts. Adjusted for a 29% marginal tax rate investment grade munis are paying the equivalent of as much as 5.28% v. less than 2.7% for the 10 treasury.

Tax flight is already reducing police and medical services massively most famously in CA. Reduced services cause more insurance pay-outs to finance more tax flight.

The vast majority of non-STEM college graduates are effectively uneducated and have trouble getting work. They will have to be written off as poorly disciplined unskilled labor.

 

[Flopper]

Well, hopefully those folks who move from high-tax states will remember why they left those high-tax states and will vote accordingly. In some cases, Dems leave high-tax states but keep voting Democratic.

Taxes may influence the decision to move across state lines but it's rarely the primary reason. The reason people move out of state can be summed up in one word, "livability" which of course includes taxes and a number of other things such as employment. However it also includes the things taxes pay for such as schools, law enforcement, roads and public transportation, parks and recreation, libraries, museums, and programs that in rich the lives of citizens.

When people decide too pull up stakes and move across the country, they look first at jobs, then they at the city where the job(s) are but not so much the state because it is the city (or town) where most people spend 99% of their time. Luckily there are very livable cities in most states, some high tax, some low tax.

 

[Jarlaxle]

who told you state income taxes were a % of federal taxes?

Depends on the state. Some are (where I used to live), some are not (where I work).

 

[Jarlaxle]

Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?

I have lived in two states with zero state income tax, Florida and Washington. In Florida the state sales tax is 6% plus an optional local tax of 1% ,which is common in most of the state. Property taxes are reasonable but not low. In Washington the state sales tax is 6.5% but local sales tax can drive that to as high as 10.4%. Property taxes are above the national average.

Keep in mind that states are going to get the funds they need. If they don't get it in income taxes they will get it in sales or property taxes. I have live in a number of states. Now I now this may sound nuts to some but states that have higher taxes are often nicer places to live, better parks and recreation, better roads, better funding for education and law enforcement.

I live in a state with no income tax and no sales tax. The roads are better than in the surrounding (high-tax) states, too!

 

[Jarlaxle]

How Quickly will State and Local Income Taxes go up?

As fast as Trump Gas prices are going up!!!

The national average on Friday was $2.65, compared with a year ago, the average U.S. motorist was paying $2.31 a gallon.
Kiss your tax cut goodbye while paying for Trump Gas.

My tax cut will be a lot more than what I pay in gas. I have a short commute to work, my wife has an even shorter one, and my road trip this year will be with a vehicle that gets ~55MPG.

 

[Jarlaxle]

Well, hopefully those folks who move from high-tax states will remember why they left those high-tax states and will vote accordingly. In some cases, Dems leave high-tax states but keep voting Democratic.

Taxes may influence the decision to move across state lines but it's rarely the primary reason. The reason people move out of state can be summed up in one word, "livability" which of course includes taxes and a number of other things such as employment. However it also includes the things taxes pay for such as schools, law enforcement, roads and public transportation, parks and recreation, libraries, museums, and programs that in rich the lives of citizens.

Taxes were the overriding reason I moved. My job moving was the catalyst, but the overriding reason I left was the taxes.

 

[jon_berzerk]

Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?

socialist states like California will right laws where they can still tax you from whatever state you moved from

--LOL

 

[william the wie]

Well, hopefully those folks who move from high-tax states will remember why they left those high-tax states and will vote accordingly. In some cases, Dems leave high-tax states but keep voting Democratic.

Taxes may influence the decision to move across state lines but it's rarely the primary reason. The reason people move out of state can be summed up in one word, "livability" which of course includes taxes and a number of other things such as employment. However it also includes the things taxes pay for such as schools, law enforcement, roads and public transportation, parks and recreation, libraries, museums, and programs that that in rich the lives of citizens.

I agree but at the rate public services are being cut, not just in CA and IL, the appearance of being in a death spiral is increasing rapidly. Also proximity matters a lot. Moving to NH or PA in the northeast makes visiting family a lot easier and getting to the usual parks and perks much easier.

 

[william the wie]

Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?

socialist states like California will right laws where they can still tax you from whatever state you moved from

--LOL

They've been trying to do that since the great Depression and according to my granduncles as far back as the Philippine Insurrection and the courts slap em upside the head.

 

[Flopper]

Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?

I have lived in two states with zero state income tax, Florida and Washington. In Florida the state sales tax is 6% plus an optional local tax of 1% ,which is common in most of the state. Property taxes are reasonable but not low. In Washington the state sales tax is 6.5% but local sales tax can drive that to as high as 10.4%. Property taxes are above the national average.

Keep in mind that states are going to get the funds they need. If they don't get it in income taxes they will get it in sales or property taxes. I have live in a number of states. Now I now this may sound nuts to some but states that have higher taxes are often nicer places to live, better parks and recreation, better roads, better funding for education and law enforcement.

I live in a state with no income tax and no sales tax. The roads are better than in the surrounding (high-tax) states, too!

What people often fail to consider is the cost to maintain roads can be drastically different depending on terrain, weather, and usage. For example, the cost of maintaining mountainous roads can be incredibly high.

 

[Jarlaxle]

And yet...the state with mountains spends LESS on roads. And has BETTER roads!

 

[Flopper]

And yet...the state with mountains spends LESS on roads. And has BETTER roads!

Road building and maintenance finance is a complicated issue. The cost depends on many factors in addition to terrain, weather, and use. Most are financed today with a combination of funds from state, local, and federal. State and local bonds are used to raise funds. Also state laws that govern acquisition of land can also increase cost.

The cost to build a two lane road in a rural area will run about 2 or 3 million dollars a mile but run that same road through a city your lucky to get by with 5 million a mile. The cost of maintenance is a lot less but that cost can vary as much as 2 to 1 depending on the foundation of the road and the type paving. I guess what I'm saying is unless you really study the roads in an area, you can't determine whether the tax payers is getting his money's worth on road construction and maintenance.

 

[william the wie]

Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?

I have lived in two states with zero state income tax, Florida and Washington. In Florida the state sales tax is 6% plus an optional local tax of 1% ,which is common in most of the state. Property taxes are reasonable but not low. In Washington the state sales tax is 6.5% but local sales tax can drive that to as high as 10.4%. Property taxes are above the national average.

Keep in mind that states are going to get the funds they need. If they don't get it in income taxes they will get it in sales or property taxes. I have live in a number of states. Now I now this may sound nuts to some but states that have higher taxes are often nicer places to live, better parks and recreation, better roads, better funding for education and law enforcement.

I live in a state with no income tax and no sales tax. The roads are better than in the surrounding (high-tax) states, too!

What people often fail to consider is the cost to maintain roads can be drastically different depending on terrain, weather, and usage. For example, the cost of maintaining mountainous roads can be incredibly high.

near total agreement but by creating additional incentives for interstate migration the SALT bills will have to go up and services will have to go down in the worst positioned states. I suspect actual defaults by states will be 3-6. Only three states CA, IL and NJ that probably would go under even if the tax bill did not exist, two MA and NY are close enough to the edge to be pulled under without intervention by the Fed, the 6th is a fudge factor for state house idiocy and panic. But the collapse will likely happen prior to the 2020. Trump does have sense enough to blame the whole mess on the Democrats which be plausible. That is why I think the lowball of the range is more likely.

 

[Jarlaxle]

And yet...the state with mountains spends LESS on roads. And has BETTER roads!

Road building and maintenance finance is a complicated issue. The cost depends on many factors in addition to terrain, weather, and use. Most are financed today with a combination of funds from state, local, and federal. State and local bonds are used to raise funds. Also state laws that govern acquisition of land can also increase cost.

The cost to build a two lane road in a rural area will run about 2 or 3 million dollars a mile but run that same road through a city your lucky to get by with 5 million a mile. The cost of maintenance is a lot less but that cost can vary as much as 2 to 1 depending on the foundation of the road and the type paving. I guess what I'm saying is unless you really study the roads in an area, you can't determine whether the tax payers is getting his money's worth on road construction and maintenance.

They're not. Massachusetts has the country's second-highest cost per mile. (Only Jersey is higher.)

 

[Thinker101]

Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?

I have lived in two states with zero state income tax, Florida and Washington. In Florida the state sales tax is 6% plus an optional local tax of 1% ,which is common in most of the state. Property taxes are reasonable but not low. In Washington the state sales tax is 6.5% but local sales tax can drive that to as high as 10.4%. Property taxes are above the national average.

Keep in mind that states are going to get the funds they need. If they don't get it in income taxes they will get it in sales or property taxes. I have live in a number of states. Now I now this may sound nuts to some but states that have higher taxes are often nicer places to live, better parks and recreation, better roads, better funding for education and law enforcement.

That may be true, but in California education, law enforcement, and the parks must be sucking up all the funds because the roads are total crap.

 

[Stormy Daniels]

Right now State and local income taxes are a percentage of federal income taxes. By moving to a state with a lower or no income tax it becomes possible to have zero federal income tax and avoid the state income tax from the state they are migrating out of. That will be the trigger for more taxes and more outmigration and this will repeat, if the people getting the good news now migrate out before the end of the year and start the cycle as appears to be happening. How soon will this cause a catastrophic loss of tax base?

That is incorrect.