How Quickly will State and Local Income Taxes go up?

[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?

 

[del]

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

 

[Moonglow]

I've been doing business taxes for thirty years and my own for 43 years and you're gonna tell me how federal taxes have a damn thing to do with state taxes...
my GOP led state has already gone up and will go up even more before the GOP majority in our state is done screwing us over...

 

[Toddsterpatriot]

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?

Leaving a state before the end of the year doesn't eliminate taxes owed to the original state.

 

[OKTexas]

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.


.

 

[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.

 

[Toddsterpatriot]

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.


.

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.

 

[william the wie]

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.


.

Accurate and succinct. What cannot be made accurate and succinct is how fast citizens and low/no state/local tax governments will figure out how to game the situation. I am trying to figure out what exp date to put on the calls for 300 sh. of NYMT that were put to me yesterday. It sells and services Mortgages in NY with a 13.6% dividend yield. I do want to keep making money off of it but the NY market is already seeing problems due to out migration especially NYC. At 7.1% per month on option premiums getting to a zero cost of acquisition should take 10 months or less but I want an exit strategy as well despite a nice remainder value.

 

[del]

you misspelled inaccurate

 

[Marion Morrison]

Wat?

I expect property taxes to rise a smidgen, maybe 1c more in state tax.

Gotta pay for extra school security.

 

[BuckToothMoron]

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

That is pretty common knowledge.

What Will You Owe for 2017?


Methodology
In this income tax calculator we calculate the federal, state and local tax burden based on your taxable income. First we calculate Adjusted Gross Income by taking your household income and making relevant adjustments including, for example, subtractions for student loan interest payments and contributions to an IRA. Then we subtract exemptions and deductions (either itemized or standard) based on your filing status to arrive at your taxable income. We apply the relevant marginal federal income tax rates to your taxable income. Finally, we use your location to calculate state and local taxes (if applicable), arriving at your total estimated tax burden. To better align with filing season, tax calculations are based on the tax filing calendar, therefore calculations prior to April are based on the previous years tax rules.
Privacy Policy
" style="box-sizing: border-box; vertical-align: super; color: rgb(188, 188, 188); font-size: 0.5em; cursor: pointer;">

Household Income


Location

Marital Status
Single Married

401(k) Contribution

Advanced Details
Your 2017 income taxes will be $22,013 with 29.17% of income to be paid to taxes.

• Marginal Tax Rate: 39.75%
  
• Effective Tax Rate: 29.17%

Tax Type Tax Amount
Federal $9,900
State $4,003
Local $2,337
FICA $5,773
Total Income Taxes $22,013

 

[Marion Morrison]

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

That is pretty common knowledge.

What Will You Owe for 2017?


Methodology
In this income tax calculator we calculate the federal, state and local tax burden based on your taxable income. First we calculate Adjusted Gross Income by taking your household income and making relevant adjustments including, for example, subtractions for student loan interest payments and contributions to an IRA. Then we subtract exemptions and deductions (either itemized or standard) based on your filing status to arrive at your taxable income. We apply the relevant marginal federal income tax rates to your taxable income. Finally, we use your location to calculate state and local taxes (if applicable), arriving at your total estimated tax burden. To better align with filing season, tax calculations are based on the tax filing calendar, therefore calculations prior to April are based on the previous years tax rules.
Privacy Policy
" style="box-sizing: border-box; vertical-align: super; color: rgb(188, 188, 188); font-size: 0.5em; cursor: pointer;">

Household Income


Location

Marital Status
Single Married

401(k) Contribution

Advanced Details
Your 2017 income taxes will be $22,013 with 29.17% of income to be paid to taxes.

• Marginal Tax Rate: 39.75%
  
• Effective Tax Rate: 29.17%

Tax Type Tax Amount
Federal $9,900
State $4,003
Local $2,337
FICA $5,773
Total Income Taxes $22,013

The horrifying part of that:

• Marginal Tax Rate: 39.75%
  
• Effective Tax Rate: 29.17%

That's just all kinds of wrong!


Taxed Enough Already!

 

[Toddsterpatriot]

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.


.

Accurate and succinct. What cannot be made accurate and succinct is how fast citizens and low/no state/local tax governments will figure out how to game the situation. I am trying to figure out what exp date to put on the calls for 300 sh. of NYMT that were put to me yesterday. It sells and services Mortgages in NY with a 13.6% dividend yield. I do want to keep making money off of it but the NY market is already seeing problems due to out migration especially NYC. At 7.1% per month on option premiums getting to a zero cost of acquisition should take 10 months or less but I want an exit strategy as well despite a nice remainder value.

I am trying to figure out what exp date to put on the calls for 300 sh. of NYMT that were put to me yesterday.

What kind of idiot would exercise those puts yesterday?
What kind of idiot would try to write calls on that stock?
I mean, you could try to find options that were more thinly traded or with a larger bid-ask spread, but
it would be tough.

At 7.1% per month on option premiums

That's funny. Which ones are you counting on selling? At what price?

 

[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.

[/QUOTE]

Certainly true in the past but unlikely to be true in the future. TN and AL are booming but are trying to state under the SALT cap because they do have bordering states with lower taxes. Mother's and Grandmother's houses in Dadeville and Jackson's Gap have been at least doubling in value since the meltdown despite going up 450% during the bubble which is rather strange if you think about it.

 

[william the wie]

You don't have to outrun the bear just the other guy seems to be the tax strategy of the states. PA is becoming a bedroom community for its super-high tax neighbors like NY, NJ and MD

 

[OKTexas]

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.


.

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.

Ok I guess my memory fails me, I haven't filed a State income tax form since 1985. They are for suckers.

.

 

[OKTexas]

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

That is pretty common knowledge.

What Will You Owe for 2017?


Methodology
In this income tax calculator we calculate the federal, state and local tax burden based on your taxable income. First we calculate Adjusted Gross Income by taking your household income and making relevant adjustments including, for example, subtractions for student loan interest payments and contributions to an IRA. Then we subtract exemptions and deductions (either itemized or standard) based on your filing status to arrive at your taxable income. We apply the relevant marginal federal income tax rates to your taxable income. Finally, we use your location to calculate state and local taxes (if applicable), arriving at your total estimated tax burden. To better align with filing season, tax calculations are based on the tax filing calendar, therefore calculations prior to April are based on the previous years tax rules.
Privacy Policy
" style="box-sizing: border-box; vertical-align: super; color: rgb(188, 188, 188); font-size: 0.5em; cursor: pointer;">

Household Income


Location

Marital Status
Single Married

401(k) Contribution

Advanced Details
Your 2017 income taxes will be $22,013 with 29.17% of income to be paid to taxes.

• Marginal Tax Rate: 39.75%
  
• Effective Tax Rate: 29.17%

Tax Type Tax Amount
Federal $9,900
State $4,003
Local $2,337
FICA $5,773
Total Income Taxes $22,013

The horrifying part of that:

• Marginal Tax Rate: 39.75%
  
• Effective Tax Rate: 29.17%

That's just all kinds of wrong!


Taxed Enough Already!

Damn, my effective rate last year was 1%, will be about the same this year. Should go to zero next year, Hehehehehe


.

 

[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.


.

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.

 

[OKTexas]

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.


.

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.


.

 

[Toddsterpatriot]

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.


.

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.

Large families, say with 6 dependents are going to loose over $25,000 in exemptions under the new law.

And they'd get an extra $6000 in child tax credit.