How about those property taxes?

[ITD]

Originally Posted by Little Bear

Sometimes politicians, journalists and others exclaim; "It's just a tax cut for the rich!" and it is just accepted to be fact, without questioning it. But what does that really mean?

Let's put tax cuts in terms everyone can understand.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go
something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1...
The sixth would pay $3...
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve.

"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer.

So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now paid $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20," (5% discount) declared the sixth man. He pointed to the tenth man, "but he got $10 out of the $20" (50% discount)

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore.

In fact, they might start drinking overseas.

Nicely put, Professor!

Great example, the only problem I have with it is it doesn't take in account the "Earned Income Credit" which gives money to the first four people that they never paid in, it's welfare and vote buying. Figure that one out.

Also I can't agree with the premise of the statement "The people who pay the highest taxes get the most benefit from a tax reduction.".
Sure they get a bigger amount returned to them, but they pay in a much larger amount to begin with. This attempt to redistribute wealth is why many high income people never become "rich". Not complaining here, but it really erks me to hear these liberal whiners cry class warfare when many of them have never had a real job in their whole life.

[fatlazyless]

It's anyone's guess but it's my hunch that the falling home selling prices will not translate into falling assessed values and lower property taxes.

In the past three years Meredith has built a new large police station and community center. In the past three years my property taxes have gone from 2800 to 8200 dollars.


At least I have something big to show for my increased taxes, indirectly or something! It's better for the community to benefit than for the individual! ...say what?

[ITD]

Originally Posted by fatlazyless

It's anyone's guess but it's my hunch that the falling home selling prices will not translate into falling assessed values and lower property taxes.

In the past three years Meredith has built a new large police station and community center. In the past three years my property taxes have gone from 2800 to 8200 dollars.


At least I have something big to show for my increased taxes, indirectly or something! It's better for the community to benefit than for the individual! ...say what?

Nope, your taxes won't go down Less, the assessment may go down but the rate will go up to compensate, just as when everyones assessment goes up the rate goes down to keep the levy the same. The problem isn't property values rising or falling, it's the spending.

[Irish mist]

The spending will never stop......the special interests have found a home in the school systems & municipal offices in the towns & villages all over the region. We have 50 million dollar schools going up, new police stations, new fire stations.....new this & that & everything.

Back in the day......folks in this region knew how to milk a buck.....now it's a free-for-all ! The political "Left" has figured out how to position themselves in money generating areas of our small towns & cities and gather enough votes to create small kingdoms where they drain the taxpayers to fund pensions & benefits that would make even the best paid managers in the private sector green with envy !
________
SUZUKI BOULEVARD C109R HISTORY

[Rattlesnake Guy]

Question:
I keep getting conflicting answers to this question. I am hoping for a decisive answer here.

These are fictitious numbers for my example.

If Mass has an 8 percent income tax and NH has a 6 percent income tax, which of these is true if I work in Mass and live in NH.

A) Mass gets 8% and NH gets 0%
B) NH Gets 6% and Mass gets 2%
C) Other

Thanks

[JayDV]

I believe that None of the above is correct. The employee will fill out W-9 or the equivalent, to identify the withholding rate for each state. At the tax filing time all numbers will true up.

The math would be:

Employer state collects tax and resident state collects tax. However, if there is a reciprocity between the states then the resident state would allow a credit for tax "X" paid to other "non-res" state(s) for "Y" dollars of income.

In the event of non-reciprocity (I'm not positive here) I think you would allocate earnings by state so therefore, employer state would have earnings and the tax would be collected and subsequently reported via non-resident calculation. Resident state would have no income allocated and therefore no tax liability.