Poor Pay Biggest Share of State, Local Taxes - The NewStandard

I dont' see why a family making $4,600 / yr shouldn't pay the same 40% I'm paying, You think they have got it bad, do you have any idea how much I'm spending in jet fuel every week?

Well if you got the phone numbers to the acountants you use to get your tax rate below 40% I'd like to know them.

ajs writes:

Well if you got the phone numbers to the acountants you use to get your tax rate below 40% I'd like to know them.

My tax rate is way below 40% (state + federal), and my wife and I eek out a pretty good living. My accountant: TaxCut (though I hear TurboTax is good, too).

I was reading this article on my lunchbreak. I work for the local school district and the source is blocked by WebSense. It's listed as an 'alternative journal'. Websense usually only blocks junk, so I'll assume it is until I can double check it this evening.

This headline of the original article (and thus this seed) is misleading and incorrect. Their is no evidence in article that states that the poor pay more or less percentage of state and local taxes. They pay a larger percentage of their own overall income even though they are taxed less simply because they make less. In other news, the sky is blue.

Has anyone here read Nickel and Dimed by Barbara Ehrenreich? She published in 2001 and said the exact same thing.

ajs, We pay pretty far below 40% and we do the taxes ourselves.

Merrydeath, ignore the pessimist! This is happening and it's not right. Read Nickel and Dimed. A lot of minimum wage, full time workers can't afford necessities. They are choosing between food and winter jackets. The problem also arises when companies like Wal-Mart don't provide insurance or raise the cost so their workers can't afford it.

It's time to wort on solutions.

Check out the graph in the article. It breaks down what share of the different brackets pay to sales, property, and income tax. Income tax is not the big tax hit for the poor. Sales tax is. Income tax looks like it's around half a percent of their income, sales tax looks like around eight percent. I don't see any way around everyone paying sales tax. The only problem here is that there is probably a big effect from 'sin taxes' on beer and cigarettes, which disproportionately affect the poor and are totally regressive.

The biggest tax on the poor is the hidden tax called the State Lottery. The people who can least afford the dollar to play are the ones waiting in line for that $360 million payday (or about half that after the Feds get done). Government never talks about the demographics of the players of these games because it is absolutely shocking.

No I was very clear when I stated that the poor pay a larger percentage of their income to state and local taxes. They do not in fact pay a larger portion of state and local tax altogether which is what the headline might suggest. The upper 50% of these people provide most of the income of the city and state.

"Poor Use Biggest Share of State, Local Services"

*cough*

Both of my parents are executives, make good sums of money, and pay between 10-15% of their income in taxes annually...always getting back 5-figure returns.

It's interesting, the poor and middle class are very intent on taxing the rich, and in the process manage to only tax themselves more heavily. Those with money know how to avoid paying taxes on it (or hire people who know). The problem seems to be more social/political than economic. I tend to attribute such things with failures in the community, and here I would have to say it's the political influence on the tax code.

I had a professor once who proposed that the government do away with all forms of "welfare" and graduated tax, and instead set a minimum taxable income of $40,000 with a tax rate of 20%. For every dollar made over $40k, it is taxed at 20%, and for every dollar under $40k, you get 20% of the difference from the government. No deductions. Ockham's razor at work, fascinating!

etfide, I see your professor's point. The problem is that $40,000 doesn't go that far anymore. If you're making $40,000 you're still the working poor.

Both of my parents are executives, make good sums of money, and pay between 10-15% of their income in taxes annually...always getting back 5-figure returns.

If someone is getting a return that large then you are paying too much up front. I try to structure my taxes so come April 15th it's as close to zero as possible. I don't want the government holding money that should be in my pocket for any length of time. I would rather have to pay on that day then get something back.

The problem is that $40,000 doesn't go that far anymore. If you're making $40,000 you're still the working poor.

The only way this level of income can be considered the working poor is maybe if you live in and around San Francisco or Manhattan. And even then it is not the working poor. There's just too much government regulation keeping consumer costs high. Then again if you were making that much you wouldn't be living there anyway, at least not for long.

In Alabama, for example, the richest one percent of the tax base paid only 3.8 percent of their income in sales tax, property tax and state-income tax, compared to 10.6 percent for the poorest fifth.

Smoke and mirrors.

Sales Taxes and Property taxes are proportionally big if you spend every dime. The top one percent of rich may make billions. They don't own that much land nor spend it all at K-Mart, so those two parts are skewed. The top earners also get tax breaks that is suppose to stimulate business. This creates jobs in the state. Those tax breaks come from the legislature.

The author could have used the middle income and mid-ranged rich. These numbers, proportionally, would ring a lot truer, but the author of the article didn't want you to see that data.

The author should have broken all the data down in the entire range from poor to wealthy and let us draw our own conclusions. (There is a distinct shade of yellow here, a hint of class warefare too.)

Skewing data and leaving out pertinent data in news articles? Journalists? Go figure......

Always remember (and never forget): In every day, in every way, blame America first.

mrcg writes:

Sales Taxes and Property taxes are proportionally big if you spend every dime. The top one percent of rich may make billions. They don't own that much land nor spend it all at K-Mart, so those two parts are skewed.

Okay, well, the first sentence is pretty much the point: these taxes are regressive. Next, I'd be willing to bet that very wealthy people own plenty of land. Most people who make below the poverty line don't own much, if any, land (in my experience).

This article certainly could use lots more information in it, I'll agree. However, you're statements only further support the point: state tax systems are often regressive with little relief for those families at the bottom.

Always remember (and never forget): In every day, in every way, blame America first.

That's such a catchy little signature you're got there, but I think you meant Alabama this time. Or do you just mean to sound like a broken record?

The only way this level of income can be considered the working poor is maybe if you live in and around San Francisco or Manhattan. And even then it is not the working poor. There's just too much government regulation keeping consumer costs high. Then again if you were making that much you wouldn't be living there anyway, at least not for long.

That's the average for teachers starting out in NYC (not just the Manhattan), and many of them stay for a long time. When my husband worked as a Community College Professor we averaged around $40,000 a year. We had no health insurance and the cost of apartments was very high and we weren't even in the a very good area. We made too much money to qualify for government help but without it we struggled to make ends meet. The cost of daycare would have exceeded my salary so we were a one income family. The only reason we stayed is because my husband loved the kids he taught. $40,000 is the working poor, and the areas you mentioned have a lot of them.

JaneMurrayStringer writes:

That's the average for teachers starting out in NYC (not just the Manhattan), and many of them stay for a long time. When my husband worked as a Community College Professor we averaged around $40,000 a year. We had no health insurance and the cost of apartments was very high and we weren't even in the a very good area. We made too much money to qualify for government help but without it we struggled to make ends meet. The cost of daycare would have exceeded my salary so we were a one income family. The only reason we stayed is because my husband loved the kids he taught. $40,000 is the working poor, and the areas you mentioned have a lot of them.

Oh get out of here with that crazy liberal talk. Don't you know that's class warfare? No, seriously, I can only imagine how tough it is to have a family living off of a teacher's salary in the inner city. You've really got to love that work. $40k means very different things in different places of the country. In my hometown, you'd live like a king (rural mountains of TN), but in most any city, you're struggling. I've had so many friends that had to decide between jobs and daycare just because they wanted families. The worst was a couple of friends in a situation similar to the story mentioned in the article. She had to quit her job at a daycare facility to stay home with the baby since they couldn't afford the cost.

broken record sums it up pretty good!