Which State?

[Snaggletooth]

On another thread Veritas asked which state has the worst tax burden. Since that question runs at a tangent to that thread below, I think her question deserves its own thread.

Veritas (proclaimed to be an Oregonian) votes for Ohio.

Lucky for myself I am in one of the few states with no income tax (Tennessee DOES in fact tax certain interest and dividends, but certainly no general tax). All states love revenue but there is a lot of resistance to raising taxes in my state and most of the other Southern States.

I haven't heard horror stories about Ohio, although I'm sure Ohio residents think that they are overtaxed. The states with the worst reputation appear to be California (obviously), Washington (a beautiful mostly rural state with no reason to be tax-hungry except for extremely liberal state government), Minnesota (known for aggressive enforcement). Also if you begin with Maryland and work northward and eastward, almost ALL of those states are sadistically tax-driven with the exception of New Hampshire and maybe its Vermont and Maine neighbors. Remember that Vermont and New Hampshire are resistant to bringing in new industry and new population -- they just sorta want to be left alone to live as they are. Only the area of New Hampshire bordering metropolitan Boston is liberal.

In particular, I believe New Jersey lies awake at night trying to invent new ways to tax its people. Some of these states aggressively tax non-residents, as this is a popular way to raise revenue without offending its own voters.

Some of the midwestern states are surprisingly conservative. Indiana for one, Iowa another, and possibly Wisconsin (although I don't know much about their structure). And I would have to say most of the Southern States are low-tax states with anti-tax sentiment. Texas and Florida, for example, don't even have a personal income tax.

Well, I've rambled. Maybe this post will awaken Nancy on the TMI staff.

My "final answer"?? I would think California.

[Unregistered]

Like most things in life, you get what you pay for.

[Bill Tubbs]

Most heavily taxed state...

Well, do you include:
* property tax (including garbage pickup?)
* income tax
* sales tax
* gas tax
* licenses (driving, hunting, fishing)
* user fees (for park trails)
* real estate transfer fees
etc. etc.

Kiplinger reviews at least some of these numbers and highlights that in an issue annually (I think). Also, most heavily taxed depends on what you compare from state to state, which makes it tough to get apples-to-apples comparision. For example, in some areas $150,000 may get you a mansion, but in other areas it may only be a small house (or condo). Also, how do you compare income in areas with higher cost-of-living vs. lower cost-of-living?

One big difference -- seniors just drawing Social Security that don't file a state income tax return. If you eliminate income tax from the calculations, you would likely get a different "most heavily taxed state" than another senior that has Social Security and other income which then requires a tax return to be filed.

Bill

[Brian EA]

Like most things in life, you get what you pay for.

hey, that was suppose to be my line

[Snaggletooth]

Do you really?

An unnamed guest said you get what you pay for -- I suppose the message was that you really get more services and support from high-tax states.

Although this appeals to your common sense, I've seen too much waste in state governments who try to solve all their problems by tax, tax, tax. Here is a perfect example.

Kentucky is an ultra-conservative state with few large population centers. During the 50s and 60s they constructed 4-lane highways and toll booths where they were needed. The revenue paid for the road construction plus interest on the bonds, PLUS a sinking fund for repairs ad infinitum. When all of this was finished, the toll booths came down, and Kentucky had at least a dozen interstate-quality roads criss-crossing their state. Travel on these roads was Cadillac-style, and you had the feeling you were getting something for your money.

New York is far from Kentucky in more ways than just miles. How many of you have ridden on the New York State Thruway? I don't know where all that money is going, but it couldn't possibly be going to take care of the Thruway. Everyone from New York agrees, but is powerless to do anything about it.

I'm aware of the studies that show ALL state taxation, including property taxes, assessments, sales taxes, etc. But the question as I've posed it might be limited to the tax subjects that the accounting profession has to deal with: Sales taxes, income taxes, audits, corporate tax, enforcement techniques, responsiveness from Revenue departments, etc.

[Unregistered]

An unnamed guest said you get what you pay for -- I suppose the message was that you really get more services and support from high-tax states.

Although this appeals to your common sense, I've seen too much waste in state governments who try to solve all their problems by tax, tax, tax. Here is a perfect example.

Kentucky is an ultra-conservative state with few large population centers. During the 50s and 60s they constructed 4-lane highways and toll booths where they were needed. The revenue paid for the road construction plus interest on the bonds, PLUS a sinking fund for repairs ad infinitum. When all of this was finished, the toll booths came down, and Kentucky had at least a dozen interstate-quality roads criss-crossing their state. Travel on these roads was Cadillac-style, and you had the feeling you were getting something for your money.

New York is far from Kentucky in more ways than just miles. How many of you have ridden on the New York State Thruway? I don't know where all that money is going, but it couldn't possibly be going to take care of the Thruway. Everyone from New York agrees, but is powerless to do anything about it.

I'm aware of the studies that show ALL state taxation, including property taxes, assessments, sales taxes, etc. But the question as I've posed it might be limited to the tax subjects that the accounting profession has to deal with: Sales taxes, income taxes, audits, corporate tax, enforcement techniques, responsiveness from Revenue departments, etc.

If you look at the lastest US Census figures, the evidence is clear. While I'm sure Kentucky and Tennessee have some positive attributes (warmer weather than my native MN this time of year, for one), the percentage of the general population below the poverty line correlates to the tax rates of the state.

I would agree with you that California probably does have one of the highest tax burdens, but then again, this correlates with a high quality of life, and fewer people below the poverty line.

[veritas]

I'm still going with Ohio.

Let's see they have:

A big sales tax

A big state income tax

A big property tax

A big school income tax

And a big city or regional income tax.

I believe when most of the country was pulling out of the last economic downturn Ohio still had the highest unemployment rate along with Oregon.

[veritas]

I'm a he not a she.

[Bees Knees]

TTB, All States Edition, Back cover:

Combined State and Local Tax Burdens by Rank:

#1, Maine 13%
#7, Ohio 11%
#47, Tennessee 8.3%

Combined State and Local Tax Burdens plus Federal Taxes

#1, Connecticut, 33.5%
#24, Ohio, 28.4%
#48, Tennessee 26.1%

Tax Freedom Day
#1, Connecticut, May 3
#24, Ohio, April 14
#48, Tennessee, April 6.

Source, Tax Foundation.

[veritas]

I haven't done a Maine return. But I was close to right.

I'm going to check that page out on TTB.

Of course Portland where I live is doing a bang up job with taxes.

We don't have sales tax but we have a state tax rate that hits 9% at 10,000 taxable on a joint return.

We have a property tax limitation that has put the skids on real estate tax increases.

However our county voted in a income tax on residents for a 3 year period which is another 1.25% of taxable income (expires in 2005). On top of that we have a business county income tax at 1.45% of taxable. A city "License" which is 2.2% of taxable income. We also have a transit income tax which I forget what the rate is.

While our state economy is improving Portland lost 30,000 jobs which have not returned with the economic up swing.

The only major building going on in the city is government or goverment subsidized.

We use to be a red state. I would like to move to a southern state if I can talk my wife into it.

[Snaggletooth]

Veritas

Welcome to the Sunny South, where all the politicians are honest and everyone maintains well-manicured lawns. (sic) Red states galore down here (much to my chagrin)

Just a note back to say our company was bidding a contract at the Army Depot at Umatilla in your state. One of the elements in the cost is taxes -- the Unemployment tax in Oregon was outrageous! The lady at the employment office told me she knew it was horrendous, but Oregon had lost so many jobs that their unemployment claims had to be paid and there wasn't enough employer base to accommodate them without such a ridiculous tax.

We decided to go ahead and bid (Oregon was VERY cordial -- I guess they needed new employers). We didn't win, but we assumed all bidders had to pay the same ridiculous rate.

[RLymanC]

Oregon

is much worse than Calif........Create a MFJ with one dependent CA W-2 for $50,000 and then change it to an OR W-2.............

[veritas]

Welcome to the Sunny South, where all the politicians are honest and everyone maintains well-manicured lawns. (sic) Red states galore down here (much to my chagrin)

Just a note back to say our company was bidding a contract at the Army Depot at Umatilla in your state. One of the elements in the cost is taxes -- the Unemployment tax in Oregon was outrageous! The lady at the employment office told me she knew it was horrendous, but Oregon had lost so many jobs that their unemployment claims had to be paid and there wasn't enough employer base to accommodate them without such a ridiculous tax.

We decided to go ahead and bid (Oregon was VERY cordial -- I guess they needed new employers). We didn't win, but we assumed all bidders had to pay the same ridiculous rate.

Our unemployment rates dropped dramatically this year.

And speaking of politicians if you have some honest ones send them here. Some of ours make the sopranos look good.

[Matt Sova]

While our state economy is improving Portland lost 30,000 jobs which have not returned with the economic up swing.

At least you live in a state with an economic upswing. Michigan's economy still sucks. Car companies shuttering plants, top suppliers pink slipping employees left and right and it all trickles down. Real Estate market is crap. And we got this stupid governor that cannot see the forest for the trees and will not get rid of the most dispicable tax in the country, the Michigan Single Business Tax.

Between that tax, high property taxes and high work comp rates, no businesses want to move here. They just want out.

[veritas]

It is interesting isn't it that pols can't understand the model that is in their face. No matter how much evidence. Lower taxes means more money for people to spend with business that in turn generates more tax revenue.