Even if you don’t live here, you might have heard that Florida local government is facing a financial crisis. State government has the sales tax, local government relies almost entirely on property tax. But property owners’ tax bills have been creeping up as the booming population drives up property values. Homeowners feel the pinch – so do renters, who pay property tax indirectly, through their landlords – and businesses complain it is reducing their profit margin and limiting the number of workers they can hire. This year there has been a grassroots tax revolt, a demand that property taxes be reduced by state legislation. (Story here.) The legislators in Tallahassee feel bound to respond – they’re still trying to work out a solution (recent story here) – but whatever they come up with is bound to reduce the revenue of local governments. Most have already imposed a hiring freeze until they see what happens. (I’ve learned of this firsthand trying to find a job as a public librarian.) Many public services may have to be cut to the bone.
A state income tax, with revenue-sharing to local governments, seems to me the only sensible solution. If designed progressively, it can shift the burden to those best able to pay. The income tax burden would not be directly affected by changes in real property values, and any “bracket creep” due to inflation could be fixed by tinkering from year to year. And maybe we could finally afford to built that high-speed rail system (authorized by a ballot initiative in 2000, repealed by another initiative in 2004).
I have, at various times, asked candidates for office what they think of the idea of a state income tax. All say it would be political suicide in Florida to suggest such a thing. Our political culture is very tax-averse. The low tax burden is one of the things that makes the state so attractive to newcomers, especially retirees. In any case, the state constitution expressly forbids an income tax; it would require a ballot initiative to introduce one. OTOH, for some reason ballot intitiatives in Florida, whatever the topic, almost always seem to pass (see above); once you’ve got it on the ballot, which is not easy, you’re halfway home.
But never mind the political viability. Would it be a good idea? Many states do have an income tax. How has that worked out?
I live in Maine (5% sales tax) and shop in NH (no sales tax), luckilly, NH is less than a 5 minute drive from home
the State of Maine knows this, and in fact, has a section on their tax forms that lets you pay a small flat-rate fee to cover your NH purchases, otherwise they threaten to audit you for any and all out-of-state purchases that “should have been taxable” had they been purchased in Maine
pure protectionisim, plain and simple, no different than a store paying “protection money” to the Mob
it sucks, if Maine doesn’t want to lose sales to other states, then do the right thing and drop the frakking sales tax
so, I vote no on sales tax, wherever it may be, sales tax Baaaaad!!
Listen to me you young whipersnapper; I’m on a fixed income, dagnabit, and I all my fellow retirees on fixed incomes will take to the ramparts and call the AARP and stuff. A state income tax indeed; I’ve never heard the like: I don’t think there’s a chance in hell of having a bill for a state income tax passed although I agree there should be one. But Just a teensie one. Like maybe making everyone who moves here pay an impact fee or something.
I suppose that one problem with a state and local income taxes is that wealthy people can shop around for a low tax jurisdiction much more readily than they can with federal income taxes.
For example, I have a wealthy family member who loves spending time in New York City but is very careful to spend less than 179 days per year in NYC so as to avoid NYC income taxes.
I could see similar things happening to Florida. This would undercut the state’s ability to raise money through an income tax.
Also, I question whether a permanent change in the tax structure is necessary to address what is probably a temporary budget crisis, at worst.
But wouldn’t that increase the amount of tax revenue and therefore make an income tax less necessary?
Still, California and New York seem to have no lack of rich people.
Of course it would, and up to now it has – but the tax protestors are demanding are demanding the property taxes be cut by state legislation, which will reduce local-government revenue. And we’ve grown accustomed to the higher level of public services high revenue made possible. Furthermore, growth in population (alongside a fixed supply, of course, of taxable real property) has increased the real demand and need for public services.
Well, if he argued for a progressive income tax in the Communist Manifesto as Carol Stream suggests, I’d say he was right there. I’m not so sure thats the case though.
ETA: hey, I looked it up, and he did. Well, he was right there then
Progressive income tax is one example. And Marx was at any rate correct in perceiving that different social classes have conflicting interests in many respects, something we should be much more aware of in the U.S. (I call myself a socialist but I’m no Marxist, BTW – in my view he was wrong about most things and the whole socialist movement would have been better off without the intellectual substructure Marx gave it – but that’s another discussion.)
Which was a whole lot easier to believe in 1848. OTOH, most people nowadays would call “universal education” a no-brainer – not as a step on the path to a classless society, but simply as something a modern society needs.
I’d disagree that progressive income tax is right under any system, under any circumstances, but that’s merely a philosophical objection that we can have out later.
Let’s put this another way: is there anything he said that even I would agree to? Otherwise we’ll spend all of our time shooting each other’s points down to little effect.
I thought I’d pop in here, being a Floridian and wanting to ask a similar question. Long ago, in my college American Government class, a fellow student brought up the point that income tax was not necessary (here she was talking about the federal income tax, but it applies here) because you could have a sales tax and still generate the same revenue. Plus, it would still be progressive in a way, because certain necessities like food or school supplies are exempt (either all the time or during certain periods of time, like the back to school sales tax break).
But then she made this statement, with which my teacher ageed, and which prompts my question- that in studies comparing states with income tax to states without, the states whose revenue depended on sales tax instead of income tax had much better economies.
I’ve just never found anything to back this up (not that I’ve searched very hard) but it’s an interesting point and hopefully a more economically savvy Doper will be along to confirm or deny this statement.
Well, according to wiki, the states without an income tax are: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming.
Dunno how you want to measure a states economy, but those states don’t jump out at me as being the states with either the best or worst economies (here’s a list of state product per capita). Alaska and Wyoming are high on that list, but I’d guess they don’t have an income tax and are high producers due to their mineral/oil wealth, not because one factor caused the other.
I don’t believe in progressive income tax because I don’t believe in penalizing success. The amount of money one must make to overcome the effects of progressive taxation is truly vast, and taking money from people who have earned it by work or putting monies at risk for the purposes of capital investment is nothing more than a cash grab.
How do we pay for things, you may ask? We don’t. We don’t implement programs, we don’t expand government powers, we limit regulation, and we tax people to the barest extent possible.
There is no such thing as “fair share”. It may be that I end up working for the rest of my life at low wage in a restaurant serving people. I absolutely aspire to better things, but if I cannot achieve them it falls upon me to admit to myself that I have no viable, useful, or desirable skills. Not that there’s anything wrong with that- having an upper end of the spectrum requires people at the bottom to support it. There’s no shame in that. But according to progressive taxation, the shame lies in the people that do make money, because their success is envied to the point that the government of the people do everything they can to slice off part of their income in the name of fairness, all the time screaming about their usurious and unethical business practices.
Not if the demand for services created by the expanding population outstrips the inflow of resources. New developments mean new roads and sewers, longer-ranging trash collections, more policing, more schools, etc… So it may be that in** some** municipalities the extra revenue from new development doesn’t quite pay for itself. Besides, if I understand my PBC-resident sister’s wailings, the property tax is not based on value-at-last-sale/mortgage, but upon “current assesment” and local jurisdictions keep ratcheting that up regardless of whether you’ve actually gained any market appreciation on your property; many people worry if eventually the tax bill will outstrip their liquidity and they’ll have to sell at a loss to stop the bleeding (I myself am quite uneasy about a tax on nonliquid “book-value” of a property wherein it’s the taxing authority itself that defines what that value is).
One part of the bigger-picture problem, of course, is that everyone wants well-paved streets, safe roads, good schools, effective police, etc. but everyone wants someone else to pay for it (“Don’t tax MY house! Don’t tax MY income! Don’t tax MY transactions!”) Or else, if they are going to pay, then they want to only pay for that which THEY use and have that which they paid for be for themselves, ("I don’t have children, why should I pay for schools? And if I have to, why should I pay for some other town’s schools?"), and everyone else can just die in the gutter.
And the other side of the one-two punch, of course, is that the government will never be sated in its demand for tax resources. You’ll likely end up with all the same taxes you had before, PLUS the new taxes, and within a couple of years start looking for some other new Bright Idea.
I don’t envy Florida voters, they’re facing a Lose-Lose situation ISTM.
(Side note: I’ve never really understood all that well the deep loathing for income taxes de-se, present in a large segment of American culture. I mean I can understand disliking paying taxes of any kind at all, period; and I can understand detesting high or unfairly-applied [ Airman Doors probably could fit progressive taxation under that heading] taxes; but why do some people think that the very notion of taxing* income * is some sort of essential moral affront above and beyond that of taxation in general? If the polity is to be allowed to shake you down for some of your money/wealth, what makes demanding a fraction of your earnings less moral than demanding one off the value of your house or off of the cash that changes hands in a sale? )