Here’s a helpful yet limited survey — comparing the states’ income tax paid on earned income — combined with the federal income tax. The comparison uses $50K and $200K salaries. CA has a highly progressive state income tax, so we don’t rank TOO badly at $50K. At $200K, CA is a close second to Oregon — the worst state. Indeed, at $200K, less than $100 tax separates these worst two states — they are essentially tied. CA moves to #1 above $200K (not included in the article), and the difference between the two states becomes more pronounced, the higher one’s income is above that $200K benchmark. This comparison counts only earned income — capital gains and dividends are treated differently by many states (NOT California). And it understandably doesn’t include other taxes — notably property taxes and sales taxes. That would constitute a MAJOR project with lots of logistical difficulties. BTW, … [Read more...] about How much is left after total income taxes are paid at $50K and $200K of income?
High income tax states
The new 2019 Tax Foundation report on state corporate income taxes ranks California as the 7th highest rate — 8.84%. It’s a tax rate that starts at $1 of profit — some other high corporate tax states have tiered rates that can provide some relief for the smaller corporations. But more important, when looking at California’s economic competitors — those states west of the Mississippi — California has THE highest corporate income tax rate (Alaska is not an economic competitor of California). Retailers have no choice — CA usually is too big a market to ignore. But non-retail companies generally are not keen on putting themselves on the Franchise Tax Board’s radar screen. Here’s the link to the full report, followed by the press release (including an excellent map) that the Tax Foundation just sent out (2/27/19): https://taxfoundation.org/state-corporate-rates-brackets-2019/ Corporate income taxes are levied in … [Read more...] about California has the highest state corporate income tax rate compared to its economic competitors
A one-page memo on January tax revenue that Minnesota Management and Budget Commissioner Myron Frans sent the governor last week sought to avoid raising alarm. Frans gently reminded the governor and all the legislative leaders who were copied on the memo that variances in one month’s tax revenue figures should be interpreted with “great caution.” Frans was reporting that January general-fund revenue was $2.28 billion, about 10.7 percent less than the most recent forecast. Most of the lines were close to the forecast but not individual income taxes, coming in about $280 million less than the $1.73 billion forecast. There’s reason to think this might be nothing worrisome, because taxpayers might still be trying to figure out the new federal tax law and the payments could just be slow. There could also have been a little slip because much of the federal government was shut down in January. On the other hand, the last state budget update before this one showed that … [Read more...] about In light of 2017 law, Minnesota needs to take a look at its income tax
click to enlarge REP. JOE JETT: Urges adoption of governor's tax break for rich. The Arkansas House today passed Gov. Asa Hutchinson's income tax cut for the rich, completing action on the bill passed earlier in the Senate. Needing 75 votes, the vote was 82-14, with two voting present and two not voting. The bill cuts the top marginal tax rate from 6.9 to 5.9 percent on income over $80,000 a year. This produces from $100 to $150 million in revenue reductions when fully implemented in two years and about three-fourths of the savings will be received by those making more than $456,000, the top 1 percent. Republican Rep. Joe Jett, arguing for the legislation, emphasized past tax cuts for lower-income taxpayers and the relatively small percentage of revenue the poorest contribute to state revenue. He repeated, as others did, the claim that a lower tax rate would make the state more competitive for business. Republican Rep. Laurie Rushing said she was withholding support for … [Read more...] about House passes income tax cut for rich
Is it better to live in a state with no income tax? It’s a great question to ask, especially when considering how much of our paycheck is already set aside for Uncle Sam. Seven U.S. states forgo individual income taxes as of 2018: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. Residents of New Hampshire and Tennessee are also spared from handing over an extra chunk of their paycheck, though they do pay tax on dividends and income from investments. The main benefit of eliminating the individual income tax, proponents say, is that states with no income tax on residents become beacons for growth. They’re better at creating jobs and keeping a core of young, educated workers from moving to other states. The American Legislative Exchange Council reports that over the past decade the nine states without a personal income tax have consistently outperformed the nine states with the highest taxes on personal income in job creation, population growth and even … [Read more...] about Is a state with no income tax — like Washington — better or worse?