Income tax v sales tax | TigerDroppings.com

Posted byMessage
doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6816 posts

Income tax v sales tax



The brackets in La. are as follows

earned income between 0-25K 2%
earned income between 25K-100K 4%
earned income over 100K 6%

Currently the state charges a 4% tax it would rise to 5.88 (+1.8%). Food, prescription drugs and utilities are exempt from state sales taxes.

Just thinking about it, low income retirees would be hit, people on welfare would be hit, and extremely low income earners would be hit.

Just about all others would come out ahead.







Back to top
Share:
joeytiger
LSU Fan
Denham Springs
Member since Jul 2012
3637 posts

re: Income tax v sales tax


Shouldn't everone pay taxes? It sounds fair to me. Isn't that what the left always claims. Go for it Jindal, it's about time everyone has to chip in, regardless of how much money they make. That's about as fair as it gets, no?





Back to top
doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6816 posts

re: Income tax v sales tax


quote:

Shouldn't everone pay taxes? It sounds fair to me. Isn't that what the left always claims. Go for it Jindal, it's about time everyone has to chip in, regardless of how much money they make. That's about as fair as it gets, no?


Everyone already pays taxes.

Personally I believe sales taxes are too high now; but I am for eleminating the state income tax.

I think making 1000s of homeownwers totally exempt from property taxes (via the homestead exemptioon) is not good.

I believe all homeowners should pay a little for basic services and then exempt them until a larger amount. That way every property owner, renter or business pays a little something for city, parish and state services.

But if I had a choice between no income tax and a slight sales tax hike I would go with door number two.






Back to top
joeytiger
LSU Fan
Denham Springs
Member since Jul 2012
3637 posts

re: Income tax v sales tax


Doesn't Texas do something similar? No income tax, but higher sales tax and higher property taxes? I would be for this as well. A higher sales tax would force people living on the government doles to pay something when they buy their flat screen TV or 20 inch rims. I like it and think it is more fair than a progressive income tax.





Back to top
doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6816 posts

re: Income tax v sales tax


To the best of my knowledge Texas has no income tax, a smaller sales tax and a larger property tax.

If you look at how prosperous Texas is, I'd just copy their tax code and be done with it; but there's probably more to it than just that.

I know Texans bitch about property tax, but they are usually in all the lists of states with lower taxes.






Back to top
  Replies (0)
I B Freeman
Member since Oct 2009
5916 posts

re: Income tax v sales tax


quote:

Currently the state charges a 4% tax it would rise to 5.88 (+1.8%). Food, prescription drugs and utilities are exempt from state sales taxes.

Just thinking about it, low income retirees would be hit, people on welfare would be hit, and extremely low income earners would be hit.

Just about all others would come out ahead


Jindal has a rebate for the poor in the bill but let's just consider the very poor and see what it takes for them to get "hit" assuming no rebate is being purposed.

Assume someone has say $10000 in taxable income. Assume they spend it all on taxable items (no way that happens). So they pay today $200 in income tax. To offset the $200 tax swap impact they will have to make purchases of $200/1.8% which is $11,111.11---that is more than they make. So there is no hit. Even the lowest income people will be saving money.



This post was edited on 3/20 at 10:52 am


Back to top
BestBanker
LSU Fan
stuck in a moment
Member since Nov 2011
3422 posts
 Online 

re: Income tax v sales tax


How about reducing or eliminating taxes and reducing the size and scope of government agencies and let people become self sufficient and responsible. If we didn't have such a large federal government the states could keep more money to take care of ALL their desires. Simple.





Back to top
CITWTT
LSU Fan
baton rouge
Member since Sep 2005
31765 posts

re: Income tax v sales tax


Sales taxes apply to each and every person at the same per centage across the board, so each person pays his "fair share" into the pot of piss to be wasted by our illustrious leaders.





Back to top
  Replies (0)
LSU316
LSU Fan
Frog City Baby!!!
Member since Nov 2007
10792 posts

re: Income tax v sales tax


quote:

That way every property owner, renter or business pays a little something for city, parish and state services.


So are you for drug dealers that are on welfare living in apartments paying 0 for these same services?



This post was edited on 3/20 at 10:59 am


Back to top
  Replies (0)
doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6816 posts

re: Income tax v sales tax


quote:

If we didn't have such a large federal government the states could keep more money to take care of ALL their desires. Simple.


Bingo, we have a winner!!!!!!!!!!!!!!!!!!!!!!!!






Back to top
BestBanker
LSU Fan
stuck in a moment
Member since Nov 2011
3422 posts
 Online 

re: Income tax v sales tax



You made my morning! Except that there's a few more inches of fresh snow on the mount and I'm going skiing! Preesh!






Back to top
  Replies (0)
Asgard Device
The Daedalus
Member since Apr 2011
4707 posts

re: Income tax v sales tax


quote:

Just about all others would come out ahead.


..unless you are a provider or large buyer of newly taxed services.






Back to top
  Replies (0)
Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7014 posts

re: Income tax v sales tax


quote:

Assume someone has say $10000 in taxable income. Assume they spend it all on taxable items (no way that happens). So they pay today $200 in income tax. To offset the $200 tax swap impact they will have to make purchases of $200/1.8% which is $11,111.11---that is more than they make. So there is no hit. Even the lowest income people will be saving money.

This ignores the fact that part of the package includes taxing services that are not currently taxed, so the marginal tax rate for those is 5.88%, not 1.88. Also you can be sure the locals will not pass up the opportunity to extend the local sales tax to those services, bringing the marginal tax rate to almost 11%.







Back to top
  Replies (0)
Nuts4LSU
LSU Fan
Washington, DC
Member since Oct 2003
18651 posts

re: Income tax v sales tax


quote:

earned income between 0-25K 2%
earned income between 25K-100K 4%
earned income over 100K 6%

Currently the state charges a 4% tax it would rise to 5.88 (+1.8%).


OK, so the worst case scenario for people in each bracket (assuming they spent all their income on taxable items):

$10,000: Now pays $200 income tax, would pay $180 in additional sales tax--saves $20
$25,000: Now pays $500 income tax, would pay $450 in additional sales tax--saves $50
$100,000: Now pays $3,500 income tax, would pay $1,800 in additional sales tax--saves $1,700
$500,000: Now pays $27,500 income tax, would pay $9,000 in additional sales tax--saves $18,500

Combined revenues to the state from all of these people:

Now collecting $31,700 in income tax
Would collect an additional $11,430 in sales tax
(obviously the percentage of revenue lost would not be this big because there are a lot more people who would be paying $20 or $50 less than people who would be paying $18,500 less, but still revenue is lost)

And remember, this is the worst case scenario for all of these taxpayers, meaning the best case scenario for the state in terms of collecting taxes. How would the state recoup those lost revenues? Isn't the state already having major budget shortage problems? How would this help? How much more in cuts can LSU take? How much less can we get away with spending on highways? Law enforcement? Elementary and secondary education? Is all of this lost revenue going to be made up with higher property taxes? Wouldn't that disproportionately hit people who own property but don't have much income (probably a lot of retirees on fixed incomes who have their houses, etc. paid for)?



This post was edited on 3/20 at 12:32 pm


Back to top
Nuts4LSU
LSU Fan
Washington, DC
Member since Oct 2003
18651 posts

re: Income tax v sales tax


quote:

Just about all others would come out ahead.


And the more they curtailed discretionary spending, the more ahead they would come out. Obviously taxing something provides a deterrent to doing it. The ones most likely to do a lot of discretionary spending (ones with higher incomes) would benefit the most from not doing so. Will it help the state's economy to deter the people most in a position to fuel it from doing so?






Back to top
  Replies (0)
Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7014 posts

re: Income tax v sales tax


quote:

earned income between 0-25K 2%
earned income between 25K-100K 4%
earned income over 100K 6%

That is not correct. The 6% bracket begins at $50,000, not $100,000.






Back to top
Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7014 posts

re: Income tax v sales tax


quote:

OK, so the worst case scenario for people in each bracket (assuming they spent all their income on taxable items):

$10,000: Now pays $200 income tax, would pay $180 in additional sales tax--saves $20
$25,000: Now pays $500 income tax, would pay $450 in additional sales tax--saves $50
$100,000: Now pays $3,500 income tax, would pay $1,800 in additional sales tax--saves $1,700
$500,000: Now pays $27,500 income tax, would pay $9,000 in additional sales tax--saves $18,500

Most of you seem fixated on the 1.8% and are ignoring the the fact that the full state and local tax of 11% will be applied to a wide range of services that are not currently taxed at all, everything from haircuts to lap dances. It is NOT a 1.8% increase. It is much more than that.






Back to top
Queen
LSU Fan
383 miles from Death Valley
Member since Nov 2009
2762 posts

re: Income tax v sales tax


Tennessee has no income tax and a 7% state sales tax...and a law that says cities can't have more than 2.75%, so no tax is ever more than 9.75%. And we have property taxes.

Stupid people gonna stupid, but this is a higher tax than even Bobby is suggesting, and we do fine.

It's not this big scary poverty punch like some people think.






Back to top
Nuts4LSU
LSU Fan
Washington, DC
Member since Oct 2003
18651 posts

re: Income tax v sales tax


quote:

Most of you seem fixated on the 1.8% and are ignoring the the fact that the full state and local tax of 11% will be applied to a wide range of services that are not currently taxed at all, everything from haircuts to lap dances. It is NOT a 1.8% increase. It is much more than that.


So, then, it will increase taxes for pretty much everybody except those who make a high enough income to save more on income taxes than they spend on additional sales taxes. Looks like the Dems pegged Jindal correctly after all. What a shocker.



This post was edited on 3/20 at 5:08 pm


Back to top
Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7014 posts

re: Income tax v sales tax


quote:

Tennessee has no income tax and a 7% state sales tax...and a law that says cities can't have more than 2.75%, so no tax is ever more than 9.75%. And we have property taxes.

Stupid people gonna stupid, but this is a higher tax than even Bobby is suggesting, and we do fine.

It's not this big scary poverty punch like some people think.


You don't seem to realize that the local sales tax rate already exceeds the state rate in much of Louisiana. The Baton Rouge rate is 5% on top of the proposed state rate of 5.8%. You're right about one thing: Stupid people gonna stupid.






Back to top


Back to top