sales tax deduction

[Johonny]

Are Dems finally going to do something about this sales tax write off scam that rethugs passed? The deduction allows people that don't have state income tax to write off sales tax instead. Am I the only one that thinks this is a total scam move? Is it any wonder the two states that made out great on this were Texas and Florida? The logic is that because they don't have income tax they have higher sales tax. Is this even true? Not really. I live in California and sales tax here is high. 7.25 %. Texas is 6.25 %, Florida 6 % (although local sales tax are generally higher in those states later states). If the deduction exists at all, shouldn't people in states with higher than the national average sales tax be able to write off the difference between their sales tax and the national average? I mean it's the difference in sales tax that is the real extra burden not the total tax. The way the law is written now, is basically completely unfair. The assumption that states with no income tax use sales tax to make up the lose of tax revenue is simply not true. Most of those states make up lost tax revenue through property taxes that are already deductible.

[jwirr]

1. So those states have no taxes while we are left with sales tax? BS

[yellowdogintexas]

2. the reason is, we have no state income tax to write off, period. So we can use

the sales tax. And while the state level in TX is 6.25, when you add local options it can be closer to 9.5 in some areas, and you can combine them. It has helped me out a bit. Now what would be a good compromise is to allow a person living in a state with an income tax to choose the greater of sales vs income to deduct. In a year with a couple of large purchases, like cars, appliances etc it could make a difference.

I calculate my state sales tax deduction based on the adjusted gross income. There is a formula which assumes what you ought to have spent based on your incomes. You can add in a large item if receipted.

The whole point was to give those of us in sales tax only states some sort of write off. The states don't really care what you take off your Federal Income tax in itemized deductions anyway.

[SmileyRose]

3. We should not be paying tax on a tax.

The tax laws are created to be unfair. I pay income taxes on money I never earned because they already took it away as taxes. Rather than take deducting sales tax away from them, we should be expanding it to everyone and add in all the other taxes we can't currently deduct.

Either that or trash the whole system. I say, On July 4 every year we all calculate our overall wealth - subtract the capital gain of our primary residence if it's total value is under a certain level and pay one flat tax on the increase in our wealth since last year. This way the top 5% will either spend their capital gains on jobs or they will spend it on taxes to provide services to the masses they refuse to employ. All the rest of us who didn't gain or flat out were robbed are not being asked to pay the bills. IMHO we just need to stop basing it on income and start basing it on wealth creation.

[Johonny]

7. I agree

If we have this deduction it should not be an either or deduction. All states that have higher than national average sales tax should be allowed to deduct the extra tax burden from their federal taxes, or else no one should. The either or simply gives people in states with no income tax (mostly red states) and extra tax write off.

[OPERATIONMINDCRIME]

4. I Actually Totally Agree With It As A Deduction. It Makes Sense.

On my taxes I can take a choice of which deduction I want (NJ). Generally, my deduction is always bigger by NOT taking the sales tax reduction. It only seems fair that states with no income tax should have this option, and it's likely that you still get equal or more deduction than they do.

[Johonny]

5. why is it fair?

The whole point in writing off income tax or sales tax is to try to equalize tax burden nationally. Some areas of the country are more expensive to live in than others. Having these write offs is suppose to balance this out. This sales tax does not do this. Many states with no income tax do not have higher sales tax. Even if they do the extra tax burden is the difference in the sales tax with the national average, not the total. The people in states with no sales tax should be taxed at a high federal level, if their overall tax burden is lower. It would be fair to pay the difference in sales tax. Which is the extra tax burden. But hey every state should be allowed this. It shouldn't be an either or prop it should be another write off. People in high income tax, high sales tax states are being treated unfair. I consider this a tax cheat passed by rethugs that needs changing. Am I wrong? So far I haven't seen a convincing argument for it. The write off as written is totally illogical.

[OPERATIONMINDCRIME]

6. ...

:eyes:

[Johonny]

8. good reply

You can just disagree. To bring nothing to the conversation is to bring nothing. I might be wrong. But so far I don't see it. Your rolling eye response brought me no closure to seeing the logic of your first argument.

[Blue Dog Dominion]

9. You can deduct either state income tax OR sales tax

Figure out which one is higher and use that. If you buy a big ticket item like a car, it might make sense to use the sales tax.

[Winterblues]

10. Do you have Municiple Sales Tax as well as State Sales Tax

Most communities receive their revenues through Sales Tax and that would be on top of any the State requires if the State does not have Income Tax.

[Still Sensible]

11. That is an inequality for sure

especially since most states make up the difference with higher property taxes and other fees, not really in the sales tax. I'm in OK and we have state income tax, adjacent to TX, which does not. Their sales taxes are virtually identical, but their property taxes are incredibly high by comparison. I know NV, also with no income tax, has slightly higher sales tax, but they have very high tourism taxes and of course get a lot of gaming tax revenue.