Income tax v sales tax | Page 3 | TigerDroppings.com

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doubleb
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Baton Rouge
Member since Aug 2006
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re: Income tax v sales tax


quote:

What basic services are you talking about? You pay for water, sewer, trash in excess of your property taxes. You dont really get anything (govt services)for your property taxes that you wouldnt get with sales or income tax


Some people don't pay any property tax or only property taxes on certain millages while their neighbor does just because their home is valued at a slightly higher ammount; yet both get the same services.

I realize everyone pays the same sales taxes, but there has to be other revenue streams for governments or you'd pay a huge rate in sales taxes.







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Bear Is Dead
LSU Fan
Monroe
Member since Nov 2007
3707 posts

re: Income tax v sales tax


quote:

The govt. picks winners and losers. Winners get tax breaks, losers make up the difference

I would like to understand what you mean by winners and losers.
LED (LA Econ Dev) issues tax breaks for small businesses that hire new employees. Its not much (I think like $1200 per employee) but it gives the incentive to hire more people. It has certainly helped up in NLA. How is that a bad thing.






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doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6884 posts
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re: Income tax v sales tax


quote:

I would like to understand what you mean by winners and losers. LED (LA Econ Dev) issues tax breaks for small businesses that hire new employees. Its not much (I think like $1200 per employee) but it gives the incentive to hire more people. It has certainly helped up in NLA. How is that a bad thing.


So why is it good for the govt. to give a business 1200 dollars for every employee they hire when they won't get 1200 dollars back in taxes?

Why should govt. help small business with their payroll and not large businesses?

I realize it's a feel good deal, but is it good business for the state? Is the 1200 bucks going to really convince an employer to hire more people? I seriously doubt it.

Where do you think the 1200 bucks comes from, btw? From the losers who paid taxes, that's where.

BTW, I started a business in June. Can anyone tap into this revenue stream? I've got 4 full time employees in the office and I have about 15 in the field.

Can anyone apply?






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Bear Is Dead
LSU Fan
Monroe
Member since Nov 2007
3707 posts

re: Income tax v sales tax


quote:

Can anyone apply?

Call LED. I dont know specifics but yea im sure you would qualify.
quote:

Is the 1200 bucks going to really convince an employer to hire more people? I seriously doubt it.

It damn sure could. If a business is thinking of expanding then they will be more inclined to do so with a tax break.
quote:

So why is it good for the govt. to give a business 1200 dollars for every employee they hire when they won't get 1200 dollars back in taxes?

That new employee will pay taxes on the revenue he makes (currently) and will also pay on the goods and services that he consumes (more so if sales tax bill passes). Its basic economic growth at work.






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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7198 posts

re: Income tax v sales tax


quote:

I feel like if this is going to work they are probably going to lobby to get rid of the homestead exemption and let the cities levy a property tax. If it isn't that way now or right when this would start, it probably will be before it's all said and done.


Lotsa luck with that. The homestead exemption is enshrined in the constitution and would require a vote of the people to repeal it.






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Puck82
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Baton Rouge
Member since Mar 2009
12994 posts
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re: Income tax v sales tax


quote:

That new employee will pay taxes on the revenue he makes (currently) and will also pay on the goods and services that he consumes (more so if sales tax bill passes).


Plus it may pull them off of any government assistance he/she may be receiving. It is a ripple effect.



This post was edited on 3/21 at 10:10 am


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Bear Is Dead
LSU Fan
Monroe
Member since Nov 2007
3707 posts

re: Income tax v sales tax


quote:

The homestead exemption is enshrined in the constitution and would require a vote of the people to repeal it.

Im not sure about this...






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I B Freeman
Member since Oct 2009
6233 posts
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re: Income tax v sales tax


These credits should not exist but of course the taxes should not either. My business has gotten some of these so let me take a stab at your questions.

quote:

So why is it good for the govt. to give a business 1200 dollars for every employee they hire when they won't get 1200 dollars back in taxes?

Why should govt. help small business with their payroll and not large businesses?


One way these tax credits differ from say the stupid film tax credits is they are not refundable or transferrable. (I assume they are still not refundable may have changed.) That means the business that gets them has to generate a tax liability to use them. So instead of taking taxpayer money to pay them as we do with film tax credits the business generates the actual revenue that is used to fund them. Still should just go away and so should the corporate income tax.

Small business can get them.

quote:


I realize it's a feel good deal, but is it good business for the state? Is the 1200 bucks going to really convince an employer to hire more people? I seriously doubt it.

Where do you think the 1200 bucks comes from, btw? From the losers who paid taxes, that's where.

BTW, I started a business in June. Can anyone tap into this revenue stream? I've got 4 full time employees in the office and I have about 15 in the field.

Can anyone apply?


Apply and see if you get them. No I never considered the credits when I made hiring decisions.






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doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6884 posts
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re: Income tax v sales tax


quote:

Apply and see if you get them. No I never considered the credits when I made hiring decisions


I doubt many businessmen would. You either need extra employees or you do not.

It's lagniappe I guess.

I'm going to look into it.






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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7198 posts

re: Income tax v sales tax


quote:

LED (LA Econ Dev) issues tax breaks for small businesses that hire new employees. Its not much (I think like $1200 per employee) but it gives the incentive to hire more people. It has certainly helped up in NLA. How is that a bad thing.


LED also administers the property tax exemption program which is the real elephant in the room. All of the hundreds of billions of dollars of industrial property generates just a trickle of property tax for local government. Like the homestead exemption, it's constitutionally protected.






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Bear Is Dead
LSU Fan
Monroe
Member since Nov 2007
3707 posts

re: Income tax v sales tax


quote:

real elephant in the room.

Explain this.






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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7198 posts

re: Income tax v sales tax


quote:

Im not sure about this...


Article VII, Section 20.






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Nuts4LSU
LSU Fan
Washington, DC
Member since Oct 2003
18724 posts

re: Income tax v sales tax


quote:

To spend AN ADDITIONAL 200 dollars in sales taxes at the higher rate(plus 1.8%)


Here's where you are leaving out the most important fact. It isn't a 1.8% increase. MANY more transactions will be subject to sales tax that aren't now (transactions for services). For those things, the increase will be 5.8%, not 1.8%.

That will easily eat up the $20 that person will save on the difference between $200 in income taxes and $180 in additional sales tax on transactions that are already taxed.

Face it, doubleb. This is either a tax increase or it is not. If it is, then it should not only increase for the poor (the rich will save enough in income tax to be able to pay the additional sales tax, AND the rich have a lot more discretionary income that they can choose not to spend in order to maximize their tax savings). If it's not, then what is the state going to do about already staggering budget shortfalls?






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Bear Is Dead
LSU Fan
Monroe
Member since Nov 2007
3707 posts

re: Income tax v sales tax


quote:

MANY more transactions will be subject to sales tax that aren't now

Maybe. We havent seen the final details.

I think for people wanting to understand this idea, you need to go back to the basic underlying theory. This would allow citizens to have more discretionary income. It puts the funds in the hands of the people and gives them the choice to pay for things that will have more taxes associated with them.






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doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6884 posts
 Online 

re: Income tax v sales tax


quote:

Here's where you are leaving out the most important fact. It isn't a 1.8% increase. MANY more transactions will be subject to sales tax that aren't now (transactions for services). For those things, the increase will be 5.8%, not 1.8%. That will easily eat up the $20 that person will save on the difference between $200 in income taxes and $180 in additional sales tax on transactions that are already taxed.


You are off with your mathematics.

The guy with 10K earned income saves 200 bucks. That's a no brainer.

You would have to assume the guy's spending habits would stay the same so the previous amount of spending would remain constant for this exercise; consequently he would pay a higher overall rate (1.8% more). This 1.8 percent wouldn't apply to food purchases, prescription drugs, rent, mortgage, electric bill, phone bill, car note, etc.

Now as you stated they would charge more to go see a movie, and some other services; but say the guy used 5% of his taxable income on movies, and other stuff that didn't get taxed before so he'd pay and extra 5.8% of 500 bucks a year or an additional 29 bucks. It isn't that much.

BTW, I am totally against charging sales tax on services like engineers, accountants, and Architects provide. I'd be against charging sales tax on movies, bowling, putt putt, etc. too.






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Layabout
UNO Fan
Baton Rouge
Member since Jul 2011
7198 posts

re: Income tax v sales tax


quote:

Explain this.

The industrial tax exemption most benefits capital-intensive industries like refining and chemical processing. A billion dollar plant will pay no property taxes for ten years. At the end of ten years it goes on the tax rolls at its depreciated value, a small fraction of the original cost.

But it doesn't end after ten years. Additional investment for replacement equipment, which ought to come on the tax rolls at full value, is also granted another ten year exemption under what the Board of Commerce and Industry calls Miscellaneous Capital Additions. This goes on in perpetuity.

The program effectively puts these companies beyond the reach of local taxing authorities. Between it and the homestead exemption, the only real source of revenue to fund local government becomes the sales tax.



This post was edited on 3/21 at 11:24 am


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I B Freeman
Member since Oct 2009
6233 posts
 Online 

re: Income tax v sales tax


quote:

LED also administers the property tax exemption program which is the real elephant in the room. All of the hundreds of billions of dollars of industrial property generates just a trickle of property tax for local government. Like the homestead exemption, it's constitutionally protected.


Both should be eliminated and the revenue held constant. Adjust the millages to reflect the new property being taxed and then have votes on new property taxes. I bet you most current property tax payers total tax would go down without the homestead exemption if the revenue was held constant when the exemption was eliminated. Of course there would thousands of new property tax payers.






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doubleb
LSU Fan
Baton Rouge
Member since Aug 2006
6884 posts
 Online 

re: Income tax v sales tax


quote:

The industrial tax exemption most benefits capital-intensive industries like refining and chemical processing. A billion dollar plant will pay no property taxes for ten years. At the end of ten years it goes on the tax rolls at its depreciated value, a small fraction of the original cost. But it doesn't end after ten years. Additional investment for replacement equipment, which ought to come on the tax rolls at full value, is also granted another ten year exemption under what the Board of Commerce and Industry calls Miscellaneous Capital Additions. This goes on in perpetuity. The program effectively puts these companies beyond the reach of local taxing authorities. Between it and the homestead exemption, the only real source of taxes to fund local government becomes the sales tax.


You are proving my point as to how the govt. picks winners and losers.

Some industries make out like bandits, while others pay their share.

Lobbyist groups long ago corrupted the system, bough toff the pols, and we are still paying for it.

You'd think by now La. would be flush with cash with all the industrial expansion, but you just illustrated why we aren't.






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Bear Is Dead
LSU Fan
Monroe
Member since Nov 2007
3707 posts

re: Income tax v sales tax


quote:

The program effectively puts these companies beyond the reach of local taxing authorities

They hire a ton of employees who spend that money, thus creating state and parish revenue in several stages.






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Bear Is Dead
LSU Fan
Monroe
Member since Nov 2007
3707 posts

re: Income tax v sales tax


quote:

You'd think by now La. would be flush with cash with all the industrial expansion, but you just illustrated why we aren't.

You are vastly overestimating LA industry compared to other states. We really havent done that much in the past few years.






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