Kentucky has a 5% Capital Gains rate, Florida has none.
Kentucky has a State level property tax, Florida none.
Kentucky has an Occupational Tax, Florida none.
Vehicle Property Tax, that's Kentucky...
It's the totality of an individual's tax liablities that we should be measuring.
This is a fun conversation about wealth inequity to which I offer my own numbers according to my 2024 tax forms. Percentages represent portion of my overall pay.
Federal Withholding $181,591.02 (36.25%)
State Withholding - Maryland $28,664.35 (5.72%)
Local - Anne Arundel County $16,024.80 (3.2%)
Social Security $10,918.20 (2.18%)
Medicare $9,973.50 (1.99%)
Federal Marginal Rate - 37%
State Marginal Rate - 5.75%
Throw in another $13,000 on property tax, $300 to register my car.
Admittedly I drink 3 beers a year and don't smoke, so Pigovian Taxes don't come into play.
No Mortgage, lived in same house for a rather long time.
In the end, I pay roughly 52% of my takehome in taxes/fees. Haven't contributed to health care yet, any insurance for home or car or a single dollar towards retirement. (some of those services have their own taxable events.)
The reason I posted this was to offer an example of how higher earners not only have higher tax exposure, but the raw data that sometimes gets hidden behind class/income discussions. My overall consumption of goods isn't out of norm for a household of 2. Out to eat once a week, nothing crazy unless it's my Anniversary.
The challenge for others becomes creating a cogent argument for why my liabilities should increase. Note I didn't say decrease. While I believe there are programs that should be removed at both Federal and State levels or significantly reduced, I accept my tax burden.
Excellent structural breakdown. The incidence point tends to get lost in state tax debates - proponents compare nominal rates but the real burden is about what share of household income actually gets taxed, which flips dramatically in income-to-consumption shifts. A household spending 95% of income vs one spending 40% faces a radically different efective rate under sales-heavy regimes even buying similar goods. I've taught intro econ and this savings-rate dynamic is always the last concpet that clicks for students.
Excellent breakdown of the structural shift. The revenue volatility angle is underappreciated -- income taxes are procyclical but in a smoothed way, while consumption taxes tend to collapse faster in recessions because people cut discrecionary spending first. I took a state and local finance course in grad school and the lesson was that states relying heavily on sales tax often face fiscal cliffs mid-recession, right when demand for education and safety-net services is actualy accelerating.
Excellent explanation!! The part that is underemphasized is that when times are bad and consumption dips, the areas that suffer significantly are critical (public safety and education) - and those impacts last for years. (I lived in Tennessee for a while and would not choose to go back to a state that does not have an income tax)
Kentucky has a 5% Capital Gains rate, Florida has none.
Kentucky has a State level property tax, Florida none.
Kentucky has an Occupational Tax, Florida none.
Vehicle Property Tax, that's Kentucky...
It's the totality of an individual's tax liablities that we should be measuring.
This is a fun conversation about wealth inequity to which I offer my own numbers according to my 2024 tax forms. Percentages represent portion of my overall pay.
Federal Withholding $181,591.02 (36.25%)
State Withholding - Maryland $28,664.35 (5.72%)
Local - Anne Arundel County $16,024.80 (3.2%)
Social Security $10,918.20 (2.18%)
Medicare $9,973.50 (1.99%)
Federal Marginal Rate - 37%
State Marginal Rate - 5.75%
Throw in another $13,000 on property tax, $300 to register my car.
Admittedly I drink 3 beers a year and don't smoke, so Pigovian Taxes don't come into play.
No Mortgage, lived in same house for a rather long time.
In the end, I pay roughly 52% of my takehome in taxes/fees. Haven't contributed to health care yet, any insurance for home or car or a single dollar towards retirement. (some of those services have their own taxable events.)
The reason I posted this was to offer an example of how higher earners not only have higher tax exposure, but the raw data that sometimes gets hidden behind class/income discussions. My overall consumption of goods isn't out of norm for a household of 2. Out to eat once a week, nothing crazy unless it's my Anniversary.
The challenge for others becomes creating a cogent argument for why my liabilities should increase. Note I didn't say decrease. While I believe there are programs that should be removed at both Federal and State levels or significantly reduced, I accept my tax burden.
Excellent structural breakdown. The incidence point tends to get lost in state tax debates - proponents compare nominal rates but the real burden is about what share of household income actually gets taxed, which flips dramatically in income-to-consumption shifts. A household spending 95% of income vs one spending 40% faces a radically different efective rate under sales-heavy regimes even buying similar goods. I've taught intro econ and this savings-rate dynamic is always the last concpet that clicks for students.
Excellent breakdown of the structural shift. The revenue volatility angle is underappreciated -- income taxes are procyclical but in a smoothed way, while consumption taxes tend to collapse faster in recessions because people cut discrecionary spending first. I took a state and local finance course in grad school and the lesson was that states relying heavily on sales tax often face fiscal cliffs mid-recession, right when demand for education and safety-net services is actualy accelerating.
Excellent explanation!! The part that is underemphasized is that when times are bad and consumption dips, the areas that suffer significantly are critical (public safety and education) - and those impacts last for years. (I lived in Tennessee for a while and would not choose to go back to a state that does not have an income tax)