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Wednesday, February 6, 2013

If You Think Federal Taxes Are Bad Consider State Taxes


David Brunori writing in the taxanalaysts  blog says he doesn’t like progressive taxes which he sees as a practice based on jealousy. His argument makes absolutely no sense to me in any way shape or form. Since 1913 when we passed the 16th amendment allowing Congress to levy income taxes, the idea of those taxes were always progressive; folk who received the most should pay the most in taxes. It just seems sensible and fair. Scripture (2 Corinthians 9.7) says God loves a cheerful giver. Not too many every seem cheerful about giving today. The Old Testament (Deuteronomy 16.17) is also clear on the ability to give: “Everyone shall give as they are able, according to the blessing of the Lord your God which He has given you.” So like progressive taxes to me. Even in the early church they tried a tried a form of “socialism” where they put everything in a common pot and took from it according to their need. Of course, it didn’t work, folk were just as selfish then as now. [Acts 2. 44-45 “All that believed were together, and had all things in common; and sold their possession and goods, and parted them to all men, as every man had need.” (Also see Acts 4. 34-37 [5.11])]
Now back to the subject; Brunori then goes on to point out that all states use regressive taxes; the poor pay more for the government than the rich, a greater percentage of their incomes. This is basically in the form of sales taxes but exempt purchases the wealthy make.
He points to a report by the Institute on Taxation and Economic Policy (ITEP) titled Who Pays? A Distributional Analysis of the Tax System in all Fifty States [http://www.itep.org/pdf/whopaysreport.pdf ] The study shows that 4 states do not have a personal income tax (Florida, South Dakota, Texas and Washington.] sounds good but is regressive but they are not the most regressive states. Well, you can read it for yourselves. On the other hand the least regressive states are Delaware, District of Columbia, New York, Oregon and Vermont.


There are enough charts in this report to choke a horse but I’ll just recommend two of them showing state comparisons found on pages 19 and 20 

10 comments:

  1. An interesting study; my state, which is owned by the GOP, routinely lowers business taxes: income, property, etc...with the idea that business will come. Invariably, the difference soon is made up by increasing taxes on individuals and families. Since education suffers, the road infrastructure deteriorates and business does not come, it appears the real justification is to enrich the rich and soak the poor. Other than that, it is a nice state...
    it needs political balance.

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  2. Catering to business interests has other types of ugly fallout .

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  3. @ Corinthians, 9:7 (NIV): "Each of you should give what you have decided in your heart to give, not reluctantly or under compulsion, for God loves a cheerful giver.

    Since taxes are taken under compulsion, this bit of scripture can't really apply to a discussion of taxation, can it? The Scripture from the OT is similarly inapplicable; it also mentions giving, not the situation of taxation (stuff taken from people by the most powerful under threat).

    "Even in the early church they tried a tried a form of “socialism” where they put everything in a common pot and took from it according to their need."

    That doesn't match socialism very well, probably the biggest difference being that it was voluntary. For the early church to be like socialism, the church elders would have taken from the flock using a threat of violence, at which point they would have used what was taken for a quite lavish lifestyle, and then tossed down the crumbs.

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    1. Some cheerfully pay taxes and some don't. For some this depends on your sense of thankfulness and whether you see the government as friend or foe. Thank Reagan for helping folk see the government as foe. Paul in this letter is encouraged a good heart of liberality (which is cheerful giving.) Also during the NT times Jesus said, "Render unto Caesar what is Caesar's and unto God what is God's." Or okay government take taxes, live with it. Remember he selected tax collectors (considered vermin by religious leaders) as disciples.

      As to the OT, that was a Theocracy where tithes (about 20% (not 10%) of income was given to the government/synagogue.

      If you don't think the NT church trial program matches socialism you haven't read Marx who defined socialism as "from each according to their ability to each according to their need." It's just he was an atheist. And if you don't think there was a threat in it you need to read the story of Ananias and Sapphira (Acts 5.1...) where Peter literally scared them to death for not being honest in giving to the church. (Not a great moment in the church.)

      Today we have separation of church and state and cheerful giving should be part of being good citizens of the country and of God's kingdom.

      Under recent conservationism what we are practicing socialism (redistribution of income) except it is from the middle and poor to the rich. I believe I have written about this before. Thus BB-Idaho nails it again.

      But the article was about state taxes as being more regressive than federal taxes. That was the point.

      I rather like Eugene Peterson's translation of 2 Cor. 9. "7I want each of you to take plenty of time to think it over, and make up your own mind what you will give. That will protect you against sob stories and arm-twisting. God loves it when the giver delights in the giving."

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    2. Bad mistake put in conservationism rather than conservatism. My bad.

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    3. "Thank Reagan for helping folk see the government as foe"

      Thank the Founding Fathers, actually, for this wisdom. They saw the government as foe, and that is why we have such writings as the Bill of Rights which places necessary limits on what the rulers can do to the ruled.

      Moving from good citizenship (which includes avoiding a slavish worship of the rulers just because they are powerful and rule) and back to taxes, it is good to remember Winston Churchill's quotation:

      "There is no such thing as a good tax."

      This recognizes the fact that taxes should not be done for frivolous reasons or just for fun, and should only be done when absolutely necessary. This is only sensible because the power of the rulers to steal money from the ruled is indeed dangerous and should be used sparingly.

      Churchill, who wisely separates taxing (giving in to the power of the wealthy to steal from you) from giving, and he also says this:

      "We make a living by what we get, but we make a life by what we give."

      That is a much better Christian message than one that it is somehow "good" to turn over our property to those who demand it by threat.

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    4. "Under recent conservationism what we are practicing socialism (redistribution of income) except it is from the middle and poor to the rich."

      Also, this fits in more with liberalism, especially recent liberalism. Again I point you to the massive handouts to banks, auto industry and other huge and wealthy corporations which are mostly supported by liberals and mostly opposed by conservatives.

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  4. "at which point they would have used what was taken for a quite lavish lifestyle, and then tossed down the crumbs."
    Trickle Down Socialism.

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    1. BB: Exactly. And it is typical (more often than not) what happens in socialist governments.

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  5. IMO, Trickle Down is a societal phenomenon; happens under all governments, all economic systems...even in corporations. The question is whether it is good or harmful.

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