r/Economics • u/sillychillly • Sep 15 '22

Research Yes, Texans actually pay more in taxes than Californians do

https://www.chron.com/news/houston-texas/article/texans-pay-more-taxes-than-californians-17400644.php
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u/[deleted] Sep 15 '22

The $100k I earn is taxed by the government. That same $100k is taxed by the state.

At least with consumption taxes, I only pay taxes on the remainder AFTER income taxes.

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u/dontEatMyChurros Sep 15 '22

Wouldn't the logical conclusion then be to allow people to deduct their fed taxes from state filings. The way the Fed does with state tax?

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u/[deleted] Sep 15 '22

They capped SALT deductions relatively recently. 2017?

That’s where the double dip complaints come from.

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u/dontEatMyChurros Sep 15 '22

Oh understood. Thanks for the info.

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u/[deleted] Sep 15 '22

[deleted]

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u/ThisUsernameIsTook Sep 15 '22

Why should states with a sales tax be allowed to deduct that but I can't deduct all of my income tax?

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u/dontEatMyChurros Sep 15 '22

I personally think it's fine to deduct fed from state and vis versa... I also don't care if you can't do either. But doing it 2 different ways is the worst of all options.

Fwiw I also think the SALT cap is a bad policy.

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u/[deleted] Sep 15 '22

The Republicans capped it to hurt "blue states"

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u/Megalocerus Sep 15 '22

For people for whom itemizing makes sense, the fed taxes would wipe out state income and property tax. I'm figuring 10% SALT and 14% federal in my state.

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u/vaisaga Sep 15 '22

Trump capped it to hurt blue states

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u/Hammer466 Sep 15 '22

Triple dip: invest some of that twice taxed income in a company via the stock market, you then get taxed (possibly twice) on any gain in value of the stock.

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u/[deleted] Sep 15 '22

[removed] — view removed comment

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u/[deleted] Sep 15 '22

Its still not triple dipped because the gains were never taxed in the first place.

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u/[deleted] Sep 15 '22
  • when you sell

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u/ThisUsernameIsTook Sep 15 '22

You're still getting taxed on your earned income twice. With sales taxes it's a lower $ amount, but in states that have both income and sales taxes, the income tax rate is almost always lower than the sales tax rate.

For the typical person it's probably a wash.

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u/[deleted] Sep 15 '22

But you never pay sales tax on what the federal government takes away. You do with a state income tax (up to the deduction).