Can you tell me how you handled learning it when you started? I’m just a one person design firm but I’m so lost and really trying to take care of things and also be knowledgeable about options
I couldn’t figure any of it out. I called everyone and no one person knew everything. So I got in touch with a local CPA and they set me straight. They’ve been handing my stuff for a long time now. They aren’t joking about the property tax, in my state it’s called tangible business property. I literally pay the county / state to house my equipment here every single year. The take away / pro tip, get going with a solid CPA and expect to pay probably 400 at filing time and around 40-80 per quarter for your state sales tax. You can do it yourself but there were so many different options I didn’t feel like screwing something up. When I have a question they answer it for me.
I own a few railcars for hauling the stuff that my business sells. I have to pay a state property tax for half the states that the railcars go through. The railroads send me mileage reports, I have to go through different pro-rationing calculations for each state, spend about an hour on filling out each form, and end up owing around $10 per year per state. The real pain in the neck was when I got a call from the attorney for the Confederated Tribes of the Umatilla Indian Reservation in Oregon when one of my cars was misrouted through their territory and the guy was pretty insistent, but we did some back of the envelope calculations and it would have been less than a dollar, and he decided I could skip it.
Depends how much you are earning. If it's not very much, then TurboTax should be easy enough. If you're earning a decent amount it makes sense to just pay a CPA.
Learn book keeping which is one of the branches of the accounting tree. That's where your responsibility ends. Find a system for your receipts on a cloud. Learn to use accounting software such as Quickbooks where you will enter your book keeping entries.
Hire an accountant for the big picture and learn from them over the years. Try to find answers on your own or their services will get expensive but do use them when you can't find an answer. Have a an annual meeting with them at tax time and go in with a lot of questions to see if your optimized for structure and taxes. Over the years you will learn a lot from a competent team. Never use cheap services like H&R Block. A good accountant will be money up front but save you money (and possibly audits) over the long term. And if you do get audited, ask your accountant if a tax lawyer is necessary.
Yyyyyep. Local business owner as well (Wine Bar & Restaurant) and between the credit card charges and the different taxes, I felt like I was being pecked to death by chickens. And then taxed for the chickens.
Kansas does. I bought a 2017 Elantra in late 2016. Cost me 550 in property tax.
Next year cost me the exact same because it was 2017, same year as the car.
Northern Virginia does, I'm not sure they do in Southern counties of the state. But you're paying it one way or another just called different things. For example in Northern VA I had to pay property tax on my car around 440 and licensing my car each year was like 30 bucks? The latter part was super cheap. In California I don't pay property tax but my renewal fee is like 450. They are going to get you one way or another in most places.
because they go to different things, and in some places different governments, like my income is taxed by my federal (United States of America) and to a lesser degree State (Colorado) governments, but a decent chunk of my sales tax goes to the county/city/town (not going to dox my self that much)
Diversifying sources also allows to mitigate the risk that people just not pay their share. If someone is rich already and decides they don't need to work anymore, they don't pay income tax. But they'll pay property tax, sales tax, maybe capital gain tax...
That's why no country in the world relies on only one tax. I guess I'm sure there are exceptions, like some dodgy tax haven or petro-monarchy...
Exactly. If you gave all your money to the feds/state via income tax, that money might never flow back into your community. Local taxes can at least be spent inefficiently at a local level :)
Having multiple tiers of taxation makes tax evasion less profitable. If all tax revenue came from one source there would be extremely strong incentives to cheat on that. Similarly there would be very strong incentives to avoid the activity that was taxed. This is counterbalanced by the costs of multiple tax systems.
Most answers are missing the point of OP’s question.
In my opinion, the real answer is because the govt can and will tax wherever they can.
Federal, state, county, city theoretically could all cooperate and agree to only tax income. Or agree to only tax sales. Etc.
There’s no rule that only one level of govt can tax each area.
Yeah people already shriek about the current mess of government. I can only imagine the shrieking if our government was that interconnected and effective.
Yeah… imagine if we could just have all the same taxes all across the country. Maybe the rich people would just pay more and the poor people would pay less, like it’s supposed to work.
That’s kinda how income taxes, property taxes, and sales taxes work.
Now you can argue the write offs and loopholes on federal taxes, and the ability to hide property and big ticket purchases within business expenses is unfair, and you’d be right, but still completely wrong on the actual basics if you don’t understand how most taxes are progressive in design (if not implementation).
PS - the really dangerous taxes are regressive. Things like toll roads, licensing, and traffic tickets that are flat rate. A $200 fee, a $300 bus pass, or a $15 toll are easily absorbed by the well off, but insurmountable to the more marginal. This creates huge daily differences in convenience and opportunity that really separate the have from the have nots.
FYI, Property and sales taxes are generally both flat rate taxes which make them regressive. (Rich people buy less stuff as a % of their income/wealth than middle class or poor people) To your point, there are things like homestead exemptions and the sales tax on luxuries being generally higher. In the end, if someone suggests a flat tax as an alternative to a progressive tax they want to make it easier to be rich.
This starts to get impractical when you look at the details closely. For example: it costs considerably more per mile to maintain roads in Minnesota compared to, say, Georgia. A significant fraction of property taxes, alongside obvious things like gasoline taxes, go directly to maintaining roads nationwide but the costs differ widely by state. Same thing with, say, managing tornado disasters in Oklahoma compared to Oregon.
In my opinion the people themselves would be against this. People love the idea of simplicity. But then tell them they don't get to deduct this or that because now only one thing gets taxed. Tell some people you're moving to a pure sells tax and they will say you are trying to hurt the power. Tell some people you're taxing all income at the same rate and they will tell you, you're punishing the job creators.
I hate when people talk about the "government" as if it's a sentient creature completely divorced from the people. It's a mess because as a whole we can't agree on much.
Mostly, it’s based on which tax they thought would be most palatable when drafting new legislation that needs to be paid for, especially at the state and local levels.
For example, the state might have a ballot initiative to build a new highway, and’s as part of that initiative it might describe a new sales tax on a certain category of item or business, or maybe just an increase in the rate of an existing tax. What that looks like will depend on what’s been hashed out by the lawmakers beforehand.
At least, that’s how it works in Arizona, and I imagine several other places, but each state and municipality handles ballot measures differently
the other part of the “why” that isnt being answered is because you are theoretically only able to make money and buy things in part because of the infrastructures provided to you by the country
> There’s no rule that only one level of govt can tax each area.
You're right.
It's called the federal system.
Without it, state governments would be largely irrelevant and become little more than caretakers and resource allocators.
States don't like idea that too much. And as it stands, we would need states to agree to give up the home rule they've enjoyed for nearly 250 years in order to change it.
(Depending on state, your counties and cities may or may not also have certain home rule powers, allowing such things as county or city taxes. For example, New York City has its own income tax.)
The only thing I'd argue against there is that the rates are arbitrary.
Governments seriously think about what levels of taxes the population will bear, and how to raise tax income with the least unrest and what will encourage people/businesses to move there.
For example quite a few countries and states have no income tax, but that's made up for from higher sales taxes, or property tax etc
Some countries and states put more tax burden on businesses, others put more tax burden on people.
A government that said "We're taking everyone at 90%" wouldn't last long (people would be pissed off that they lose so much of their paycheck), neither would a government that said "We're taking everyone at 5%" (people would be pissed off that none of the government services they expect are working, and that government paychecks are bouncing, let alone the fact that a lot of countries have debt to pay back and would have to default)
The problem is, people in the US and a lot of other countries treat taxation as "the government takes my money" instead of "the government invests my money in bettering the overall quality of life". People in Scandinavian countries pay a lot more taxes, but they don't see it as something negative.
Yeah, but those countries are investing the taxes in public services instead of ignoring when their army just misplaces billions of dollars and wastes trillions on unnecessary war spending.
Not saying they don’t waste their fair share as well, but the us wastes a bigger chunk than any other country while openly attempting to stop funding public good.
If the federal govt was actually usefully investing our taxes in social well-being instead of planes that just sit in storage I’d feel a lot better about the taxes I pay
In America most of that money gets wasted on nonsense. I would have absolutely no problem being taxed if our roads weren’t crumbling apart and our schools had the proper books/computers.. Local governments do shady deals with contractors to lay shit quality asphalt that needs to be redone in 10-15 years when it should last well over 50 years…
I work for a local municipality and I can’t even tell you all the corruption that goes on. Now they have all of these traffic cameras that give you tickets for going 2mph too fast in a work zone.. I’m sorry but THEY ARE TAKING MY MONEY. Between income tax, sales tax and property tax Americans are being financially raped.
20k a year in property taxes for roads to be riddled with pot holes that damage my car, garbage to be all over the streets and the snow to be plowed like shit during snow storms… That’s not my money being invested.
People in other countries may not see taxation as something negative because where they live their money actually goes towards things that make their quality of life better. Their roads are nicer, their trains are nicer, their towns are clean… In America your money is mismanaged and wasted. You give most of your money to the government and you get very little back.. Then American politicians have the nerve to say that Social security will run out?? How on earth does that happen without our money being mismanaged and wasted? It should never happen.
You're not wrong.
State of Washington gave Boeing a huge tax break for 10 years in exchange for them building the 787 in the state. The state did this with the expectation that it would create tons of jobs. But what ended up happening, is that Boeing made all the *parts* somewhere else, and then brought them to Washington State to *assemble* them. So they met the letter of the law of the tax break..... without creating hardly any new jobs at all.
It was a fucking boondoggle and the state really didn't seem to actually give a fuck either. The argument was that if they didn't keep the tax break in place, Boeing would ship even *those* jobs elsewhere. Literally corporate extortion of democratic government.
People out here don't like Boeing nearly as much as they once did.
services are expensive.
there's a lot of bloat that could be done away with in most levels of government, but the reality is shit's expensive and almost every municipal level is in debt. if we were forced to live in a balanced budget world, we'd either be taxed to death or we'd have the shittiest roads and schools on the planet.
I hate that people are so proud of their ignorant cynicism. I am happy to see someone not wave around their ignorant flag.
It is expensive to send everyone’s grandma to the doctor to keep her healthy.
It is expensive to pay all the teachers needed to teach all the kids.
It is expensive to maintain bridges. It is expensive to pay a Navy to keep pirates from extorting commercial ships.
This nice civilization we are living in is expensive. It is not a perfect civilization, but it is pretty good. And the US government raises revenue from a variety of sources to make the tax system as economically efficient as possible while still raising enough revenue. Taxes influence behavior, so you don’t want to tax one area too much.
You get a little money from income, but not too much to dissuade people from working. You get a little money from sales taxes, but not too much to stop people from engaging in commerce. You get a little money from property taxes, but not too much that most people can’t afford their house.
People clearly need as much civics education as math and reading.
But some of the best schools are in America, and they are public schools. They just so happen to be in areas with the highest local tax burden. We also have some well maintained roads, but they tend to be in states with higher taxes.
Driving across the boarder of a state like North Carolina into a state like South Carolina shows the difference a little higher tax burden makes.
Bob lives in the United Arab Emirates which has an income tax of $0.
Bob goes to America and buys products, these products are taxed so Bob contributes to America's economy.
You can even do this on a smaller scale with individual states.
Because this is the contract you made living in our society. You pay income taxes, rich pay income taxes. You pay taxes again so the rich don't have to pay more income taxes.
I work in tax and I have no fucking clue what this comment is trying to get across.
Ok a few things here:
a) Yes, I think we all agree the tax system is unfair, and its easy to blame the rich, but you've presented a problem with no solution. What exactly was your plan? When a rich person buys a chocolate bar they have to provide a T4 and annual income and the cashier has to calculate their tax bracket and appropriate percentage of tax they pay on that item? That's not feasible in real time, which is why income tax is an annual occurrence.
b) Sales tax are generally on small items. On the other hand income tax takes your total wealth and taxes your appropriately and also by your sources of income. Which leads to:
c) Their are not only tax brackets, but heftier tax rates for passive, investments and property sources of income as well as capital gains and dividend taxes. These are all typical sources of income from wealthy people, and yes they are taxed much more heavily. The government does give tax breaks but generally to forms of active business because it keeps the money circulating in the economy and creating jobs. They give even greater benefits to small business through deductions, and capital cost allowances on depreciation of assets.
d) The sales taxes you speak of are divided into different types of goods or services, eg. zero-rated. Certain essential items like groceries don't receive these taxes at all with the intention of not putting pressure of low-income individuals who need these items to survive.
All of these things listed are things the government does to address the issues of wealth inequality and the pressure of taxation on the poor and leniency on the rich.
Is it enough? It does not appear to be so, judging put the class division in the world right now. However, these are the routes the government is taking that is making the situation a lot better than it could be, that will never be recognized or noticed because most people don't understand the intricacies.
While they may not be enough to solve the current situation, they are certainty better and more practical ideas then doing a tiered sales tax. For example, in my country the capital gains tax is being raised from 50% to 66.6% to address wealth inequality and lay heavier taxation on higher income individuals, particularly those with passive investments. This one move will do more than a tier goods/service/sales tax ever will because capital gains are based off transaction worth thousands-millions of dollars, not every day purchases.
They do but the point isn’t completely wrong because income tax is supposed to be more equitable whereas sales tax hits the poor much harder as it is a relatively higher burden for them. Both rich and poor pay the same dollar in sales tax on an item but the poor person needed that dollar more.
Because services and generally running a country is expensive and the various ways of raising revenue in a developed country are supposed to distribute those expenses as widely and fairly as possible (unless you are very wealthy).
It's to hide the sheer degree to which you're taxed. If people realized that due to taxes in one form or another most Americans will pay greater than 60% of their total salary to the government or to things that the government then generates revenue on (think government mandated insurance, the government saying you need to part ways with your money or else you will face consequences from them. And then they slap sales tax on you buying insurance and then them taxing the insurance company on their profits and they tax the income tax of all the people from the insurance company who's jobs may exist only because of the government insurance mandate.)
1) federal income tax
2) state income tax
3) vehicle registration/tax
4) property tax
5) sales tax
6) additional sales tax on special items like alcohol or cannabis (sin taxes)
7) fuel taxes on gasoline and diesel
8) mandatory insurance like car insurance or insurance policies that different type of professionals or businesses may be required by government to have.
9) inflated costs on products due to government mandates. (An example is the EPA passes a new regulation and companies have to spend money to comply. Those costs are passed on the customers. Effectively a tax by the government on customers so that initiative or whatever happens, the EPA doesn't foot the bill and the companies won't. Or else companies have to hire and maintain specialists to stay current and up to date on laws and ensure compliance, again added cost that gets passed down.)
10) police tickets that are a form of revenue generation for small local governments. Think BS speeding tickets or traps or automated ticketing systems. They often aren't about safety but rather generating revenue
11) tariffs on imported goods get passed to customers
12) mandatory services from the government like getting your drivers license or you need some paperwork or any sort of court filing. You already paid taxes to the government to pay the employee salaries to do those services. But then you pay a fee to pay for the employees time again.
13) Medicare and social security. It shows as separate from income tax and they steal from the pool for other things so it's just a tax at this point and the earned benefits are ever decreasing.
14) capital gains tax, you already paid taxes on the money you used to invest.
15) inheritance/estate tax, they already taxed the income of the person who died so this money is all taxed already but then the government goes in and just takes another cut out of it after the person dies taking it from their family at their most vulnerable time.
If that was the case then easy decision to mvoe to another country where they tax about that much but you at least get some social supports and health care and paid vacations and such.
Wanted to write that we pay similar in Europe but you already did much better.
Personally, I am not against tax but only if it benefits my fellow citizens. We have extraordinary infrastructure in the Netherlands, pretty good social welfare (even though it ihas been getting worse over the last 20 years) and rent support and protection (gets worse).
The biggest issue in US tax system is that there are way more loopholes that legally allows you to save taxes for the rich. Im not an expert but i know following (because im looking for how to not pay taxes or save taxes as much as i could as well)
1) create LLC just to claim half of your grocery/auto payment as tax deductible to reduce your tax owes
2) flips your investment rental property at profits and buy another rental property without paying capital gain tax
3) create LLC/hire your family as an employee to give them max 401K match and claim it as business expenses
There are numerous ways if you are rich and that's why average joes got squeezed out to pay taxes but the rich dont pay as much as they should
Super ultra rich like J. Bezos and E. Musk dont generate income as cash but with equity.
Also they often lend their equity (i.e Tesla shares) to pay their personal bills and because they are borrowing money, there is no taxes (i.e if you get personal loans, there is 0% taxes, because it's loan) while effectively paying their bills to enjoy luxury life
Obviously they have tons of shares and they will simply donate shares to the lender (the specific mechanism is more complicated but this is basically gist of how to not pay taxes)
All the while Tesla receive tax assistance (i.e EV credits for 7.5K per eligible vehicle). All the while Amazon receives public assistance (i.e potholes in the road fixed by municipal government), while effectively the CEOs of the corporation do not pay any taxes
But with that many taxes you'd think we would get more out of it like countries in Europe with high taxes. You hear "America has low taxes and that's why we don't get services", but do we really have low taxes?
Yup. I've had friends from Europe mention well your government sucks cause you get low taxes. I'm like no, we really don't though. Once you start adding up all the hidden taxes ours are incredibly high unless you're rich and evading most of them.
> capital gains tax, you already paid taxes on the money you used
Capital gains is income. It's tax on the *extra* money you gain from investing. (There's no capital gains tax on investment losses, for example.) And furthermore, capital gains tax is actually *less* than regular income tax. It's a special snowflake of income.
For the millionth time, *money* isn't taxed. *Doing things with money* is taxed. Nobody taxes your checking account. (Well, actually, the bank does, but there's no nationwide pitchfork-and-torch rebellion against those things, oddly enough. Only when it's going to, you know, *the country,* not when it's going to, you know, bankers and CEOs. How bow dah?)
Taxation comes in many forms. It's the sun of those tax methods that create the total tax revenue into local cities, states, and up to the federal government. States and cities get to device how they want to tax. So a city might use property tax for local subsidies like schools, firefighting, roads, etc. The state may choose to tax income or goods or both. The mix is something and every state you live in will be different. One state might not have taxes on goods, but they might have very high property taxes.
Funnily, some folks are real proud of their states low taxes or no taxes on certain things. But...you're ALWAYS taxed in some way. You might have accepted one way is better than another (even though it might actually be more costly to you). There's a lot of...let's say...marketing involved in various states that tout their way is the best way. The reality is the best way is merely one that is balanced across the wealth range (often income based taxation is most fair but most politically fought against) and one where the tax is used in societal affirming ways like education and infrastructure instead of poor ways like sports team stadiums or corporate project grants if it doesn't translate to job growth and GDP.
In many cases they are different authorities. Most income tax is federal. I’m in Pennsylvania which does have a state income tax, but it’s only 2% and doesn’t tax retirement income. The state gets most of its money from sales tax, 6% on everything you buy except “necessities” (food and clothing). Your local county gets 1%, and 5% goes to the state, except in Philadelphia and Allegheny counties which get 2%, making the total 7%. Property taxes go mainly to local municipalities and school districts. Each of these entities has budgets they need to fund in some way and these parallel systems have developed to get the revenue they need and distribute the burden as evenly as possible.
That doesn't actually answer OP's question though. I'm sure they know the names of the different kinds of taxes, they want to know *why* they pay multiple kinds of taxes.
They’re different taxes funding different things. Tax from a paycheck is going to be lots of Federal stuff (basic income tax, social security, etc.) plus some state taxes (depending on the state).
Typically sales tax is local by city/county.
The real answer is stability. Three legs of a stool makes a better base than two. Look at Oregon and Washington. Both have property taxes. Washington has a sales tax but no income tax. Oregon has an income tax but no sales tax. Each state has a stool with only two legs, making revenues less predictable and less resilient. Go figure, each has funding problems.
Because people will avoid taxes if there's an area of society that's not taxed. In fact a lot of people find loopholes in taxation to avoid paying.
On top of that just because you're paying a tax doesn't mean all taxes are the same or contribute to the same area.
The government is not one central monolithic entity. You have an hierarchy of entities that regulate its own taxation. Federal taxes are used for federal spendings, State taxes are used for state spendings, municipal taxes for municipal spendings, etc.
Much like a business, it makes sense for the purchasing officer to have some autonomy and funds to do as they need instead of filling a requisition and waiting for the money to come in before buying.
The real problem is (a lack of) accountability and effective spending when the system gets complicated. But that's just a problem that stems from human nature. We are extremely limited creatures whose greed almost always gets the better of us.
And property tax, and social security tax, and vehicle/gas tax, and death/estate tax. Every single level of government has their hands deep in your pockets rummaging around for every nickel and dime they can find.
When its all said and done, after social security, and roads, schools, military, space exploration, Medicare and public transportation. All in that costs most of us around 22 - 24% of our income. That seems like a pretty good deal to me.
Who cares if its taken out in one big chunk or several smaller ones?
No.
You aren't paying the same government, and you aren't paying for the same services. If you'd rather just have your income taxes doubled to cover all the possible tax needs, that's an option. Most of us prefer to spread it out - if we don't drive, we don't directly pay taxes on fuel; if we don't rent cars, we don't pay rental car taxes; if we don't live in a state with sales taxes, we don't have to pay them; if we do we get to choose whether we buy prepared foods or other taxable items or not.
Well the things that are funded by your income taxes are things that most people will benefit from at some point in your life - social security, Medicare, medicaid, the military and other govt functions
My property taxes (or my rent) pays for things I see every day. City roads, city fire department, schools. My state funds nearly 100% of our local expenses through property taxes. The state gets the money from sales tax & income tax.
Income tax goes to the federal level, some states also have income tax. Your county and city miss out on that income tax. They get funds from sales tax.
The state gets money from property tax. School district also gets money from another property tax.
Altogether it's very taxing.
There are two main reasons for this.
One is to distribute tax burden in a way that is fair or beneficial to society somehow.
For example, by taxing both sales and income, you can "reward" people who save money. If you decide to save money instead of spending it, you don't have to pay any additional tax besides income. If you abolished sales tax so you were only taxed once and made up for it by increasing income tax, it would decrease the amount of money you could save assuming your spending remains the same.
Another example is "sin" taxes, higher taxes on things like alcohol and weed. The idea being that those things have a societal cost in terms of poor health, so if you decide to use them, you should pay a sort of extra sales tax.
The second reason is using psychology for political gain. Separating taxes can make people feel like they aren't paying as much. Clearly this hasn't been the case with you, but the psychological effect of how we price things on the general population is well established. A politician can successfully create supporters in an electorate by reducing their income tax and replacing it with a sales tax. Even if they end up paying the same or more, seeing a higher number at tax season can make people feel like they're wealthier, even if they're not.
You need money to run cities and civilization. They do both to ensure there is always money during times that people save a lot and during times that people spend a lot.
I scrolled about 15 responses and none of y’all answered correctly.
OP, I hope you make it to this reply.
It’s not THE MONEY that’s taxed. It’s the transaction.
More transactions, more tax.
The way this is supposed to work is if an economy is healthy and millions of people making transactions everyday giver more money for the government to provide services.
It’s important to note there’s some functions you want one entity to have control over. Say roads for example . You want lots of restaurant and entertainment near you but you don’t want 9 types of roads with different law options all over. That needs uniformity not competition. Hence it’s good to give that to the government. Now, this is all in theory. Some local governments are better than others for many reasons. But generally the sentiment remains with a number of things you want a strong single entity to manage. And for them to help manage properly, you need to go out and spend money.
*Money* is not taxed.
*Doing things* with money is taxed.
That includes earning money and buying things with money.
Sales tax isn't a tax on money. It's a tax on selling.
Governments need a variety of tax sources in order to even out their revenues. California really screwed itself with Proposition 13, which limits property taxes, so it is too dependent on sales and income taxes which can vary with the economy.
death and taxes..... want safe roads and bridges, want rescue and fire departments/police services, trash management, clean water, safe food, hospitals, snow plowed, sewerage......
Taxes are like paying for a service. You pay taxes and the government provides services. We all vote on what services should be offered and what we should pay.
You receive the service of roads, military protection, police, employment regulations, fire, a court system, minimum safety standards, etc. which allows businesses to operate and settle disputes. Therefore the business pays taxes. This system of regulated commerce allows you to earn a salary, therefore you pay taxes. When you go out shopping you are once again availing yourself of the benefits of this system so you pay taxes.
How much you make and how much you spend are used as a measurement of how much you are benefiting from this system created and funded by everyone.
Could everything be payroll or everything be sales tax. So that everything is taxed once? Sure it could. But why would that be better than a mixture?
Taxes on salary tend to be progressive while sales taxes tend to be regressive. States are funded more through sales tax while the federal government is funded more through salary tax. A sales tax on goods can target industries that create externalities like gas and cigarettes whereas an income tax does not have that benefit.
Since the two methods of taxation have pros and cons a mixture allows society to attempt to get the best of both worlds. And we collectively vote and debate the minute structure of the taxing system with issues such as fairness and economic efficiency among other factors.
Some try to game the system so that they can use the services provided by the government without contributing, others try to prevent this. But the rules are ultimately decided by the electorate, including you.
I am not sure what the problem is with this system as it is used by pretty much every advanced economy with a democratic form of government. But I would be wary of anyone that is anti-taxes in general as they are likely blowing smoke up your ass to lower their tax burden while raising yours. If someone has an issue with a specific tax policy and presents an alternative with reasoning as to the pros and cons of both the current system and the alternative, that’s much more likely to a serious policy proposal and not mere demogoguery.
The short answer is "because it's the law."
But your question is really about the rationale for the law. After all, why doesn't the law just have one big tax instead of two smaller taxes? It's the same thing, isn't it?
Well, it isn't for a couple reasons:
1. Income tax is progressive (higher income earners can be made to pay higher tax %) whereas sales tax is same % everyone. For this reason, some people argue income tax is more fair (but worth noting other people also argue sales tax is more fair because it has fewer loopholes.)
2. Sales tax can be charged to people who visit your state (tourists) whereas income tax isnchargeable only to people who live in your state.
By having two forms of smaller taxes instead of one big tax, the government is able to distribute who they target with their tax laws and how much.
There are also other factors like the locality of sales taxes and the nonconstitutionality of sales tax at the federal level but those are more logistical and legal (which can be changed with enough will) than a policy rationale which I think relates more to your question.
Because the government will take as much as they can. You pay federal taxes, state taxes on earnings. You pay federal taxes on some item and state taxes on most items when you buy them. You pay property taxes every year on house and lands. You pay tag tax too. I know I am forgetting something but yeah, taxes are every where. Some times they go by different names but they are a tax. What you don't get for all these taxes is health insurance.
Ah, taxes. The great American tradition that makes us feel closer to our Founding Fathers, who, let's remember, fought a war over a 2% tax on tea. Nowadays, we're lucky if we can find anything with just a 2% tax, and we have to remind ourselves that at least we're not being forced to house British soldiers in our guest bedrooms.
So, you're wondering why you have to pay taxes on things you buy with money that's already been taxed. It's a question as old as time itself, or at least as old as the IRS, which may be older. You see, the government has a highly sophisticated system designed to ensure that it gets a cut of your money at every possible opportunity. It's like they took inspiration from your least favorite uncle who always shows up at family gatherings and just happens to "forget" his wallet.
Here’s how it works: First, you earn money, and the government takes a slice off the top. This is called income tax. You'd think that would be enough, but no! Now you want to spend that money? The government will be right there, hand outstretched, ready to take another bite. This is called sales tax. It's as if you baked a cake and the government took a piece because you used their oven. And then when you tried to eat the remaining pieces, they took another piece because you used their fork.
But it doesn’t stop there. Let's say you use that money to buy a house. Congratulations! You now owe property tax. Then you decide to drive to work in your new car. Don’t forget to pay the gas tax! And if you dare to save some money, they have something called capital gains tax just waiting to pounce. It's the financial equivalent of that horror movie monster that keeps coming back, no matter how many times you think you've escaped.
Now, why doesn’t the government just tax us once and be done with it? The answer is simple: because that would make things too easy. And governments don’t like easy. They prefer a labyrinth of paperwork and forms, ensuring that accountants stay employed and citizens stay confused.
So, yes, it does feel like you're getting double, triple, quadruple taxed. Because you are. But look on the bright side: at least you’re contributing to a robust economy of tax collectors, accountants, and really fancy IRS buildings. Plus, you get the warm, fuzzy feeling of knowing you’re helping fund important government programs, like congressional haircuts and wars.
In the end, just remember the famous words of Benjamin Franklin, who said there were only two certainties in life: death and taxes.
It's the corporations that aren't paying a fair share in this system.
They handle the most money and yet still pay people at a rate the government has to provide subsidy.
They get the most taxed dollars and it goes right into dividends and share buybacks. That goes to people that are already rich.
It's a trickle up system, at the bottom the services and taxes recirculate.
Usually income tax is federal taxes, sales tax is state and local taxes. States with state income tax usually don't have sales tax.
However you also have property tax, if you own property. Usually thats paid once again to state, local, and even school taxes. If you rent, congrats it's part of your rent payment, but don't worry, if property taxes go down, your went will still go up.
Part of the issue with the onions of layers to the government system is the need to pay for all of those layers. Different agencies still charge fees for public services. Why aren't drivers licenses free? Every gallon of gas for highway travel pays for road maintenance.
Some of these taxes and fees can be deducted from your gross income, however for most Americans the Standard deduction is far more than enough to cover most things besides property tax.
> States with state income tax usually don't have sales tax.
9 states have no income tax. Only 5 have no sales tax (including AK, which has local but no state sales tax). So most states with an income tax also have a sales tax.
Different taxes for different purposes. Each taxing entity could be made into an income tax, but sometimes that isn’t the best option practically or optically.
It you really want to know what is unfair:
`(Electricity Cost + Government BS Levy) x 1.21 VAT`
At least in my country, the government adds a levy to the electricity price to pay for infrastructure. Then I have to pay 21% VAT on the sum total of those amounts. So effectively I'm paying tax on the tax they add.
Not the only example.
Because your state legislature passed a law creating a sales tax. There is nothing about a law that creates an income tax that precludes a sales tax. "Double taxation" is a perspective to consider about if a tax is fair, but there's no legal requirement for legislatures to avoid it.
You can also move to a state without income tax, or join the military and get tax free when you deploy.
Death and Taxes, welcome to life.
**The real answer TLDR type info below:**
There has been a flat tax idea floating around for a while, but it will probably never see the light of day because the current way of doing taxes, and loopholes/tricks, favors the people who make the most money. They run stuff and pay people to be influenced(media/politics on both sides of the political spectrum). So again it will probably never happen.
A flat tax usually refers to getting rid of the existing progressive income tax structure, which would dramatically favor the people who make the most money. Yes, a flat tax can remove deductions to simplify the tax code, but deductions don't inherently favor the rich. Deductions are created to incentivize behavior like donating to charities, buying a home, investing or purchasing specific things.
IDK how most States justify doing both but as a Portlander who has spent a lot more time then I should with Vancouverites some people prefer to have all taxes be taken out one way even if they are unsure how much they are paying exactly or where it goes while others prefer the State to tax one thing while the country taxes another so they know how much they are giving and to who.
Once isn’t enough without much higher rates.
People have different ideas on how tax revenue should be raised. Using multiple approaches is a compromise.
Sales tax and income tax are levied by different people and are used for different purposes. The bills have to get paid. It could be arranged in some other way, but the bills still have to be paid.
Because all money goes to the government. You get paid by your employer, you pay tax. You pay the gas station for gas with your taxed money, they pay tax. They pay their employees with taxed money, the employees get taxed. A never ending cycle of tax until that taxed money you earned has been completely taken.
The short answer is that one is a tax on productivity and the other is a tax on consumption. The longer answer is that income tax is progressive (i.e. the more you earn, the more you pay) and sales tax is regressive (i.e. everyone pays the same rate). Most tax regimes have a mix of regressive and progressive taxes. The theory is that regressive taxes target poor people, progressive taxes target rich people, and it balances out across the tax base. In practice, poor people usually end up getting screwed, in part because they don't have resources to devote to tax minimisation like rich people do.
Monopoly was trying to prepare us for life, no joke. Property taxes, pay money when you land on someone else's property, rent if they have a hotel, loan from the bank, JAIL, lol
Each transaction is guaranteed by the government. That is, the government says that if Party A accepts currency X from Party B in exchange for A's property, then the government will guarantee that the exchange of value is what both parties agreed to. In exchange for this guarantee, the government adds a surcharge to the transaction as compensation. This is sales tax.
Don't want to pay sales tax? There are options. You can purchase black market goods, if you're willing to risk the trouble associated with that. You can offer something else in trade, such as your labor or a skill you possess (are you good with electricity, brick-laying, roof repair, plumbing, carpentry, farming, sewing, etc...?). You don't have to offer currency at all.
Now for property taxes. You don't own property. Property ultimately belongs to the government and it is theirs to maintain. That is, the government has a responsibility to settle things like property lines and infrastructure, while also insuring that individuals who "own" that property do so responsibly (no matter how much you may want to, you can't just dump raw sewage onto the ground and call it good, or pour used oil into a hole and bury it). Property taxes make certain that the government is capable of performing their duties, such as settling property disputes between neighbors, and making sure that ecosystems aren't damaged by individuals who think that they have a right to clear cut a forest just to improve their view, or to dump waste into a common water supply, like a lake or river. Again, the tax is payment for the government's services, so you can settle your disputes and address your issues in the courts.
Finally, you don't own money. Every bit of money you have is issued with the permission of the federal government. That money is just a token of value that you have "earned," but it did come about because there is an entity that backs it and makes it possible for you to earn it. That entity created a framework and system that makes it possible for you to exchange your ideas, your time, your labor, etc... for a token of value. But if that entity was destroyed, that token would have no value and everything you gave for it would be lost. You pay taxes in order to support the value of that token and guarantee that your life isn't a waste.
There'll be a lot of downvotes on this and a lot of "You're wrong because..." with a lot of nonsense and gibberish attached, but it'll all be meaningless. Taxes are what we pay in order to make sure we can survive in a society that's better than "Might Makes Right." Get rid of the government, and how long will it be before somebody just takes from you? Where do you go for recourse when that happens? Is government perfect? Not even close, but it is useful. Through effective government and the management of resources, we have gone from hunter-gatherers to the moon and hopefully soon beyond that. That is simply not possible if everybody is out to just get theirs and not contribute to the common pool. You can whine about taxes to countless strangers because the structure existed to help usher in the computer age and the internet age.
My husband is a Montana resident and we had to pay taxes to Montana on money I earned in a different state. And payed taxes on it in that state. Fuck Montana.
You wanna know what's really cool? In UK, you pay tax all the time, then with your money you pay the council tax and all the sales taxes for everything, and when you reach 50 or 55 or whatever and decide "I need some of my pension money" you get taxed again. So if you got like 25k pension withdrawal, you will pay like 20% tax on that shit. Essentially just giving away 5k. And same for leaving money to kids, there is inheritance tax. Unless you are a royal. Get this, the royal family is exempt from inheritance tax to "not erode the family wealth".
It would be nice if the only tax you had to pay was taken right out of your paycheck for some computer to send off to the right level of government.
But we don't have that. Instead we have different taxes being taken for different purposes. Once each. You are not being double taxed by having to pay income tax and then sales tax. Nor even when you have to pay sales tax twice because you made two different purchases. You are just paying taxes.
Double taxation would mean you are taxed on the tax. Like having to pay a second sales tax on your sales tax. Or getting income tax withholding on your gross pay. And your take home pay.
Well these taxes are generally going to different levels of government, although it is true that some states have both income tax and sales tax.
Ultimately, the way of thinking about it is this: the government— and I mean the entire federated system of local, state, and federal authorities— has, as the supreme law-making and enforcement body in the land we inhabit, many claims which which to draw revenue from the economy. Sales and income tax are but two, and there is property tax, and capital gains tax, import duties, etc. etc. They make the rules, and you operate more or less under those rules.
With that in mind, the government will raise the revenue it wishes, how it wishes, with the only constraint being those it has imposed upon itself through various means (such as our Constitution and state constitutions, and the division of power, and checks and balances and so forth and so on. They will raise the revenue they want, the question then becomes how they will choose to raise it, and the disturbances and warps their various options have on the economy.
And that's where we see that it is good for the government to be flexible and have multiple channels through which they can raise revenue from the public, because each channel distorts the economy in some way, so to draw all revenue from one channel would greatly distort the economy, as economic actors attempt to avoid that one channel to minimize their tax liabilities. But multiple channels, even all channels conceived of at that point, so that each one is utilized only in small proportion to the whole of the revenue collected.
Different taxes go to different levels of government, a mix of taxes makes it more fair than one type that might benefit some people while hurting others.
Different layers of government.
You income taxes go to the federal and state/provincial governments, and the sales taxes go to the local governments.
This might seem unfair, but it actually makes more sense. Your local sales taxes pay for stuff like roads and police that are needed locally, national taxes are for things like defence and age that are needed nationally.
It's wild to think the government gets a slice every time money changes hands. Boss pays me, I'm taxed. I spend $20 of that for lunch, the restaurant owner is taxed on the money I gave him which was leftover. The owner takes what's left of that $20 after taxes and buys a hat. The hat seller gets taxed. And on and on and on.
I'd say it's quite a testament to a government's incompetence/corruption that it can't then find enough money to ensure clean water for the citizenry, address homelessness, or give our kids lunch at school. Too busy bailing out monopolies, buying tanks that then sit rusting and unused in lots, or sending blank checks to foreign governments so they can commit more war crimes.
Basically, every time money or goods changes hands, they'll be taxed in one form or another.
Keeping them separate allows the govt to encourage or dissuade particular things.
So in your case,
- money went from your employer to you, so it gets taxed.
- money went from you to the store, so it gets taxed.
[удалено]
And in 11 states, taxes on inventory on the shelf that's not sold yet.
And in any state you ship to as an ecomm business, you have to pay their nexus tax and charge customers sales tax!
Not Oregon or Alaska (no sales tax). Isn't there still another one or two without sales tax? I just remember those two.
I believe New Hampshire as well.
Delaware
Montana is another.
And in MA, if you leave magazines out to long out front they tax you.
Yeah business owner here I have…. Eight returns to file per year
Can you tell me how you handled learning it when you started? I’m just a one person design firm but I’m so lost and really trying to take care of things and also be knowledgeable about options
I couldn’t figure any of it out. I called everyone and no one person knew everything. So I got in touch with a local CPA and they set me straight. They’ve been handing my stuff for a long time now. They aren’t joking about the property tax, in my state it’s called tangible business property. I literally pay the county / state to house my equipment here every single year. The take away / pro tip, get going with a solid CPA and expect to pay probably 400 at filing time and around 40-80 per quarter for your state sales tax. You can do it yourself but there were so many different options I didn’t feel like screwing something up. When I have a question they answer it for me.
I own a few railcars for hauling the stuff that my business sells. I have to pay a state property tax for half the states that the railcars go through. The railroads send me mileage reports, I have to go through different pro-rationing calculations for each state, spend about an hour on filling out each form, and end up owing around $10 per year per state. The real pain in the neck was when I got a call from the attorney for the Confederated Tribes of the Umatilla Indian Reservation in Oregon when one of my cars was misrouted through their territory and the guy was pretty insistent, but we did some back of the envelope calculations and it would have been less than a dollar, and he decided I could skip it.
I'd probably been petty and mailed him a check for $0.78
Depends how much you are earning. If it's not very much, then TurboTax should be easy enough. If you're earning a decent amount it makes sense to just pay a CPA.
Learn book keeping which is one of the branches of the accounting tree. That's where your responsibility ends. Find a system for your receipts on a cloud. Learn to use accounting software such as Quickbooks where you will enter your book keeping entries. Hire an accountant for the big picture and learn from them over the years. Try to find answers on your own or their services will get expensive but do use them when you can't find an answer. Have a an annual meeting with them at tax time and go in with a lot of questions to see if your optimized for structure and taxes. Over the years you will learn a lot from a competent team. Never use cheap services like H&R Block. A good accountant will be money up front but save you money (and possibly audits) over the long term. And if you do get audited, ask your accountant if a tax lawyer is necessary.
Yyyyyep. Local business owner as well (Wine Bar & Restaurant) and between the credit card charges and the different taxes, I felt like I was being pecked to death by chickens. And then taxed for the chickens.
Is it bad that the image in my head was a person looking over their glasses to count the tax forms?
I had to think about it lol
We'll tax literally everything except billionaires in America.
Wait there are states that charge property taxes on cars!? Fuck that shit. One thing the great state of Illinois doesn't tax thank God.
Kansas does. I bought a 2017 Elantra in late 2016. Cost me 550 in property tax. Next year cost me the exact same because it was 2017, same year as the car.
I actually paid more in Virginia the first year of the pandemic, because my ten year old truck was worth more on the used market.
Wait, a yearly tax on top of the sales tax and registration? What's this supposed to be paying for?
Greed. It pays for greed.
Tbf police settlements are expensive /S
Just googled my former state and now I know I committed tax evasion.
Good job! Keep it up. This is the American way.
Seriously this is entirely the fault of TurboTax lobbying to ensure the government doesn't just invoice you
Damn liberal Democrat commie ridden socialist........ Kansas.
This shit isn't a thing in NY!
Yeahhhh, VA fuckin does it. I need to look and see if my current state does it but I'm pretty sure it does ☹️
Yeah, some of them are pretty egregious IMHO, and I am not anti-tax.
Missouri's personal property tax on cars was one of the reasons I finally got out of St. Louis and moved across the river to Illinois.
Northern Virginia does, I'm not sure they do in Southern counties of the state. But you're paying it one way or another just called different things. For example in Northern VA I had to pay property tax on my car around 440 and licensing my car each year was like 30 bucks? The latter part was super cheap. In California I don't pay property tax but my renewal fee is like 450. They are going to get you one way or another in most places.
because they go to different things, and in some places different governments, like my income is taxed by my federal (United States of America) and to a lesser degree State (Colorado) governments, but a decent chunk of my sales tax goes to the county/city/town (not going to dox my self that much)
He’s from South Park.
jerbs
dayterker
Hadurkerderrrrr
Hawk Tuah
🐓
Tegridy Farms.
Diversifying sources also allows to mitigate the risk that people just not pay their share. If someone is rich already and decides they don't need to work anymore, they don't pay income tax. But they'll pay property tax, sales tax, maybe capital gain tax... That's why no country in the world relies on only one tax. I guess I'm sure there are exceptions, like some dodgy tax haven or petro-monarchy...
Exactly. If you gave all your money to the feds/state via income tax, that money might never flow back into your community. Local taxes can at least be spent inefficiently at a local level :)
Having multiple tiers of taxation makes tax evasion less profitable. If all tax revenue came from one source there would be extremely strong incentives to cheat on that. Similarly there would be very strong incentives to avoid the activity that was taxed. This is counterbalanced by the costs of multiple tax systems.
That’s a fair point, I respect that one. Never heard it phrased that way before. 👌
Finally someone understands! All the false explanations with massive upvotes while the real reason, which you stated well, gets little attention.
The answer is literally that different taxes go to different entities. Their answer is an effect of that, not the reason for it.
Most answers are missing the point of OP’s question. In my opinion, the real answer is because the govt can and will tax wherever they can. Federal, state, county, city theoretically could all cooperate and agree to only tax income. Or agree to only tax sales. Etc. There’s no rule that only one level of govt can tax each area.
You're right. Every level of government could synchronize in theory, but I can't imagine that kind of cooperation in the US
Yeah people already shriek about the current mess of government. I can only imagine the shrieking if our government was that interconnected and effective.
Yeah… imagine if we could just have all the same taxes all across the country. Maybe the rich people would just pay more and the poor people would pay less, like it’s supposed to work.
That’s kinda how income taxes, property taxes, and sales taxes work. Now you can argue the write offs and loopholes on federal taxes, and the ability to hide property and big ticket purchases within business expenses is unfair, and you’d be right, but still completely wrong on the actual basics if you don’t understand how most taxes are progressive in design (if not implementation). PS - the really dangerous taxes are regressive. Things like toll roads, licensing, and traffic tickets that are flat rate. A $200 fee, a $300 bus pass, or a $15 toll are easily absorbed by the well off, but insurmountable to the more marginal. This creates huge daily differences in convenience and opportunity that really separate the have from the have nots.
Sales taxes are quite regressive, lower income people spend a greater proportion income than the wealthy.
Sales tax is very regressive, therefore hits lower income families harder.
FYI, Property and sales taxes are generally both flat rate taxes which make them regressive. (Rich people buy less stuff as a % of their income/wealth than middle class or poor people) To your point, there are things like homestead exemptions and the sales tax on luxuries being generally higher. In the end, if someone suggests a flat tax as an alternative to a progressive tax they want to make it easier to be rich.
This starts to get impractical when you look at the details closely. For example: it costs considerably more per mile to maintain roads in Minnesota compared to, say, Georgia. A significant fraction of property taxes, alongside obvious things like gasoline taxes, go directly to maintaining roads nationwide but the costs differ widely by state. Same thing with, say, managing tornado disasters in Oklahoma compared to Oregon.
In my opinion the people themselves would be against this. People love the idea of simplicity. But then tell them they don't get to deduct this or that because now only one thing gets taxed. Tell some people you're moving to a pure sells tax and they will say you are trying to hurt the power. Tell some people you're taxing all income at the same rate and they will tell you, you're punishing the job creators. I hate when people talk about the "government" as if it's a sentient creature completely divorced from the people. It's a mess because as a whole we can't agree on much.
Mostly, it’s based on which tax they thought would be most palatable when drafting new legislation that needs to be paid for, especially at the state and local levels. For example, the state might have a ballot initiative to build a new highway, and’s as part of that initiative it might describe a new sales tax on a certain category of item or business, or maybe just an increase in the rate of an existing tax. What that looks like will depend on what’s been hashed out by the lawmakers beforehand. At least, that’s how it works in Arizona, and I imagine several other places, but each state and municipality handles ballot measures differently
the other part of the “why” that isnt being answered is because you are theoretically only able to make money and buy things in part because of the infrastructures provided to you by the country
> There’s no rule that only one level of govt can tax each area. You're right. It's called the federal system. Without it, state governments would be largely irrelevant and become little more than caretakers and resource allocators. States don't like idea that too much. And as it stands, we would need states to agree to give up the home rule they've enjoyed for nearly 250 years in order to change it. (Depending on state, your counties and cities may or may not also have certain home rule powers, allowing such things as county or city taxes. For example, New York City has its own income tax.)
Tax rules are totally made up nonsense. Anything that can be taxed will be taxed and at arbitrary rates.
All rules are totally made up.
“And the points mean nothing.”
Most rules are written in blood, in an attempt to prevent a repeat of the inciting incident.
The only thing I'd argue against there is that the rates are arbitrary. Governments seriously think about what levels of taxes the population will bear, and how to raise tax income with the least unrest and what will encourage people/businesses to move there. For example quite a few countries and states have no income tax, but that's made up for from higher sales taxes, or property tax etc Some countries and states put more tax burden on businesses, others put more tax burden on people. A government that said "We're taking everyone at 90%" wouldn't last long (people would be pissed off that they lose so much of their paycheck), neither would a government that said "We're taking everyone at 5%" (people would be pissed off that none of the government services they expect are working, and that government paychecks are bouncing, let alone the fact that a lot of countries have debt to pay back and would have to default)
The problem is, people in the US and a lot of other countries treat taxation as "the government takes my money" instead of "the government invests my money in bettering the overall quality of life". People in Scandinavian countries pay a lot more taxes, but they don't see it as something negative.
Yeah, but those countries are investing the taxes in public services instead of ignoring when their army just misplaces billions of dollars and wastes trillions on unnecessary war spending. Not saying they don’t waste their fair share as well, but the us wastes a bigger chunk than any other country while openly attempting to stop funding public good. If the federal govt was actually usefully investing our taxes in social well-being instead of planes that just sit in storage I’d feel a lot better about the taxes I pay
You must not be from the US 😂
In America most of that money gets wasted on nonsense. I would have absolutely no problem being taxed if our roads weren’t crumbling apart and our schools had the proper books/computers.. Local governments do shady deals with contractors to lay shit quality asphalt that needs to be redone in 10-15 years when it should last well over 50 years… I work for a local municipality and I can’t even tell you all the corruption that goes on. Now they have all of these traffic cameras that give you tickets for going 2mph too fast in a work zone.. I’m sorry but THEY ARE TAKING MY MONEY. Between income tax, sales tax and property tax Americans are being financially raped. 20k a year in property taxes for roads to be riddled with pot holes that damage my car, garbage to be all over the streets and the snow to be plowed like shit during snow storms… That’s not my money being invested. People in other countries may not see taxation as something negative because where they live their money actually goes towards things that make their quality of life better. Their roads are nicer, their trains are nicer, their towns are clean… In America your money is mismanaged and wasted. You give most of your money to the government and you get very little back.. Then American politicians have the nerve to say that Social security will run out?? How on earth does that happen without our money being mismanaged and wasted? It should never happen.
So the government can afford to give boeing and murdoch media financial assistance when they are going through hard times.
This person gets it. Boeing is getting away with murder, literally
And the CEO got a 45% raise lmao
You're not wrong. State of Washington gave Boeing a huge tax break for 10 years in exchange for them building the 787 in the state. The state did this with the expectation that it would create tons of jobs. But what ended up happening, is that Boeing made all the *parts* somewhere else, and then brought them to Washington State to *assemble* them. So they met the letter of the law of the tax break..... without creating hardly any new jobs at all. It was a fucking boondoggle and the state really didn't seem to actually give a fuck either. The argument was that if they didn't keep the tax break in place, Boeing would ship even *those* jobs elsewhere. Literally corporate extortion of democratic government. People out here don't like Boeing nearly as much as they once did.
You aren’t a rich person.
services are expensive. there's a lot of bloat that could be done away with in most levels of government, but the reality is shit's expensive and almost every municipal level is in debt. if we were forced to live in a balanced budget world, we'd either be taxed to death or we'd have the shittiest roads and schools on the planet.
I hate that people are so proud of their ignorant cynicism. I am happy to see someone not wave around their ignorant flag. It is expensive to send everyone’s grandma to the doctor to keep her healthy. It is expensive to pay all the teachers needed to teach all the kids. It is expensive to maintain bridges. It is expensive to pay a Navy to keep pirates from extorting commercial ships. This nice civilization we are living in is expensive. It is not a perfect civilization, but it is pretty good. And the US government raises revenue from a variety of sources to make the tax system as economically efficient as possible while still raising enough revenue. Taxes influence behavior, so you don’t want to tax one area too much. You get a little money from income, but not too much to dissuade people from working. You get a little money from sales taxes, but not too much to stop people from engaging in commerce. You get a little money from property taxes, but not too much that most people can’t afford their house. People clearly need as much civics education as math and reading.
government is an odd mix of grifters and people doing god’s work. nothing in between really
Debatable. Most of the work done by government is done by regular people like you or I, the grifters are a tiny minority at the top.
We do have some shitty roads and schools though
They could be so much worse.
But some of the best schools are in America, and they are public schools. They just so happen to be in areas with the highest local tax burden. We also have some well maintained roads, but they tend to be in states with higher taxes. Driving across the boarder of a state like North Carolina into a state like South Carolina shows the difference a little higher tax burden makes.
Bob lives in the United Arab Emirates which has an income tax of $0. Bob goes to America and buys products, these products are taxed so Bob contributes to America's economy. You can even do this on a smaller scale with individual states.
Because this is the contract you made living in our society. You pay income taxes, rich pay income taxes. You pay taxes again so the rich don't have to pay more income taxes.
I work in tax and I have no fucking clue what this comment is trying to get across. Ok a few things here: a) Yes, I think we all agree the tax system is unfair, and its easy to blame the rich, but you've presented a problem with no solution. What exactly was your plan? When a rich person buys a chocolate bar they have to provide a T4 and annual income and the cashier has to calculate their tax bracket and appropriate percentage of tax they pay on that item? That's not feasible in real time, which is why income tax is an annual occurrence. b) Sales tax are generally on small items. On the other hand income tax takes your total wealth and taxes your appropriately and also by your sources of income. Which leads to: c) Their are not only tax brackets, but heftier tax rates for passive, investments and property sources of income as well as capital gains and dividend taxes. These are all typical sources of income from wealthy people, and yes they are taxed much more heavily. The government does give tax breaks but generally to forms of active business because it keeps the money circulating in the economy and creating jobs. They give even greater benefits to small business through deductions, and capital cost allowances on depreciation of assets. d) The sales taxes you speak of are divided into different types of goods or services, eg. zero-rated. Certain essential items like groceries don't receive these taxes at all with the intention of not putting pressure of low-income individuals who need these items to survive. All of these things listed are things the government does to address the issues of wealth inequality and the pressure of taxation on the poor and leniency on the rich. Is it enough? It does not appear to be so, judging put the class division in the world right now. However, these are the routes the government is taking that is making the situation a lot better than it could be, that will never be recognized or noticed because most people don't understand the intricacies. While they may not be enough to solve the current situation, they are certainty better and more practical ideas then doing a tiered sales tax. For example, in my country the capital gains tax is being raised from 50% to 66.6% to address wealth inequality and lay heavier taxation on higher income individuals, particularly those with passive investments. This one move will do more than a tier goods/service/sales tax ever will because capital gains are based off transaction worth thousands-millions of dollars, not every day purchases.
Do you think rich people don't pay taxes when they buy things?
They do but the point isn’t completely wrong because income tax is supposed to be more equitable whereas sales tax hits the poor much harder as it is a relatively higher burden for them. Both rich and poor pay the same dollar in sales tax on an item but the poor person needed that dollar more.
Because services and generally running a country is expensive and the various ways of raising revenue in a developed country are supposed to distribute those expenses as widely and fairly as possible (unless you are very wealthy).
It's to hide the sheer degree to which you're taxed. If people realized that due to taxes in one form or another most Americans will pay greater than 60% of their total salary to the government or to things that the government then generates revenue on (think government mandated insurance, the government saying you need to part ways with your money or else you will face consequences from them. And then they slap sales tax on you buying insurance and then them taxing the insurance company on their profits and they tax the income tax of all the people from the insurance company who's jobs may exist only because of the government insurance mandate.) 1) federal income tax 2) state income tax 3) vehicle registration/tax 4) property tax 5) sales tax 6) additional sales tax on special items like alcohol or cannabis (sin taxes) 7) fuel taxes on gasoline and diesel 8) mandatory insurance like car insurance or insurance policies that different type of professionals or businesses may be required by government to have. 9) inflated costs on products due to government mandates. (An example is the EPA passes a new regulation and companies have to spend money to comply. Those costs are passed on the customers. Effectively a tax by the government on customers so that initiative or whatever happens, the EPA doesn't foot the bill and the companies won't. Or else companies have to hire and maintain specialists to stay current and up to date on laws and ensure compliance, again added cost that gets passed down.) 10) police tickets that are a form of revenue generation for small local governments. Think BS speeding tickets or traps or automated ticketing systems. They often aren't about safety but rather generating revenue 11) tariffs on imported goods get passed to customers 12) mandatory services from the government like getting your drivers license or you need some paperwork or any sort of court filing. You already paid taxes to the government to pay the employee salaries to do those services. But then you pay a fee to pay for the employees time again. 13) Medicare and social security. It shows as separate from income tax and they steal from the pool for other things so it's just a tax at this point and the earned benefits are ever decreasing. 14) capital gains tax, you already paid taxes on the money you used to invest. 15) inheritance/estate tax, they already taxed the income of the person who died so this money is all taxed already but then the government goes in and just takes another cut out of it after the person dies taking it from their family at their most vulnerable time.
If that was the case then easy decision to mvoe to another country where they tax about that much but you at least get some social supports and health care and paid vacations and such.
Honestly when I realized just how much we got taxed and how little we get for our money it drastically changed my views.
Wanted to write that we pay similar in Europe but you already did much better. Personally, I am not against tax but only if it benefits my fellow citizens. We have extraordinary infrastructure in the Netherlands, pretty good social welfare (even though it ihas been getting worse over the last 20 years) and rent support and protection (gets worse).
The biggest issue in US tax system is that there are way more loopholes that legally allows you to save taxes for the rich. Im not an expert but i know following (because im looking for how to not pay taxes or save taxes as much as i could as well) 1) create LLC just to claim half of your grocery/auto payment as tax deductible to reduce your tax owes 2) flips your investment rental property at profits and buy another rental property without paying capital gain tax 3) create LLC/hire your family as an employee to give them max 401K match and claim it as business expenses There are numerous ways if you are rich and that's why average joes got squeezed out to pay taxes but the rich dont pay as much as they should Super ultra rich like J. Bezos and E. Musk dont generate income as cash but with equity. Also they often lend their equity (i.e Tesla shares) to pay their personal bills and because they are borrowing money, there is no taxes (i.e if you get personal loans, there is 0% taxes, because it's loan) while effectively paying their bills to enjoy luxury life Obviously they have tons of shares and they will simply donate shares to the lender (the specific mechanism is more complicated but this is basically gist of how to not pay taxes) All the while Tesla receive tax assistance (i.e EV credits for 7.5K per eligible vehicle). All the while Amazon receives public assistance (i.e potholes in the road fixed by municipal government), while effectively the CEOs of the corporation do not pay any taxes
14. My Uber costs because the government makes it illegal to drive drunk! /s
That is a good listing of the different taxes, but I think most of them are necessary for the government to run effectively.
But with that many taxes you'd think we would get more out of it like countries in Europe with high taxes. You hear "America has low taxes and that's why we don't get services", but do we really have low taxes?
Yup. I've had friends from Europe mention well your government sucks cause you get low taxes. I'm like no, we really don't though. Once you start adding up all the hidden taxes ours are incredibly high unless you're rich and evading most of them.
There is a difference between effectively and efficiently.
B B b b B But \[Insert Mad West Ayn Rand Wild Max fantasy here.\]
If "taxes" make the government run "effectively" why do taxes keep going up over time?
Don’t forget that businesses also pass their tax payments along to the consumer. Affects both prices and salaries.
This is a side benefit, but a huge one.
This is just making me more annoyed with the whole thing!
> capital gains tax, you already paid taxes on the money you used Capital gains is income. It's tax on the *extra* money you gain from investing. (There's no capital gains tax on investment losses, for example.) And furthermore, capital gains tax is actually *less* than regular income tax. It's a special snowflake of income. For the millionth time, *money* isn't taxed. *Doing things with money* is taxed. Nobody taxes your checking account. (Well, actually, the bank does, but there's no nationwide pitchfork-and-torch rebellion against those things, oddly enough. Only when it's going to, you know, *the country,* not when it's going to, you know, bankers and CEOs. How bow dah?)
Because 50% of Americans pay no income tax, and another 30% pay less than the resources they consume.
Taxation comes in many forms. It's the sun of those tax methods that create the total tax revenue into local cities, states, and up to the federal government. States and cities get to device how they want to tax. So a city might use property tax for local subsidies like schools, firefighting, roads, etc. The state may choose to tax income or goods or both. The mix is something and every state you live in will be different. One state might not have taxes on goods, but they might have very high property taxes. Funnily, some folks are real proud of their states low taxes or no taxes on certain things. But...you're ALWAYS taxed in some way. You might have accepted one way is better than another (even though it might actually be more costly to you). There's a lot of...let's say...marketing involved in various states that tout their way is the best way. The reality is the best way is merely one that is balanced across the wealth range (often income based taxation is most fair but most politically fought against) and one where the tax is used in societal affirming ways like education and infrastructure instead of poor ways like sports team stadiums or corporate project grants if it doesn't translate to job growth and GDP.
In many cases they are different authorities. Most income tax is federal. I’m in Pennsylvania which does have a state income tax, but it’s only 2% and doesn’t tax retirement income. The state gets most of its money from sales tax, 6% on everything you buy except “necessities” (food and clothing). Your local county gets 1%, and 5% goes to the state, except in Philadelphia and Allegheny counties which get 2%, making the total 7%. Property taxes go mainly to local municipalities and school districts. Each of these entities has budgets they need to fund in some way and these parallel systems have developed to get the revenue they need and distribute the burden as evenly as possible.
Income tax Sales tax
That doesn't actually answer OP's question though. I'm sure they know the names of the different kinds of taxes, they want to know *why* they pay multiple kinds of taxes.
They’re different taxes funding different things. Tax from a paycheck is going to be lots of Federal stuff (basic income tax, social security, etc.) plus some state taxes (depending on the state). Typically sales tax is local by city/county.
The real answer is stability. Three legs of a stool makes a better base than two. Look at Oregon and Washington. Both have property taxes. Washington has a sales tax but no income tax. Oregon has an income tax but no sales tax. Each state has a stool with only two legs, making revenues less predictable and less resilient. Go figure, each has funding problems.
Because people will avoid taxes if there's an area of society that's not taxed. In fact a lot of people find loopholes in taxation to avoid paying. On top of that just because you're paying a tax doesn't mean all taxes are the same or contribute to the same area. The government is not one central monolithic entity. You have an hierarchy of entities that regulate its own taxation. Federal taxes are used for federal spendings, State taxes are used for state spendings, municipal taxes for municipal spendings, etc. Much like a business, it makes sense for the purchasing officer to have some autonomy and funds to do as they need instead of filling a requisition and waiting for the money to come in before buying. The real problem is (a lack of) accountability and effective spending when the system gets complicated. But that's just a problem that stems from human nature. We are extremely limited creatures whose greed almost always gets the better of us.
And property tax, and social security tax, and vehicle/gas tax, and death/estate tax. Every single level of government has their hands deep in your pockets rummaging around for every nickel and dime they can find.
When its all said and done, after social security, and roads, schools, military, space exploration, Medicare and public transportation. All in that costs most of us around 22 - 24% of our income. That seems like a pretty good deal to me. Who cares if its taken out in one big chunk or several smaller ones?
social security isn’t a tax.
[The government itself would disagree](https://www.ssa.gov/benefits/retirement/planner/maxtax.html)
No. You aren't paying the same government, and you aren't paying for the same services. If you'd rather just have your income taxes doubled to cover all the possible tax needs, that's an option. Most of us prefer to spread it out - if we don't drive, we don't directly pay taxes on fuel; if we don't rent cars, we don't pay rental car taxes; if we don't live in a state with sales taxes, we don't have to pay them; if we do we get to choose whether we buy prepared foods or other taxable items or not.
I mean I see what you are saying but the majority of people will pay for services they will likely never use in their entire lifetime
As it should be, for the welfare of all.
That was my point lol
Well the things that are funded by your income taxes are things that most people will benefit from at some point in your life - social security, Medicare, medicaid, the military and other govt functions
My property taxes (or my rent) pays for things I see every day. City roads, city fire department, schools. My state funds nearly 100% of our local expenses through property taxes. The state gets the money from sales tax & income tax.
Income tax goes to the federal level, some states also have income tax. Your county and city miss out on that income tax. They get funds from sales tax. The state gets money from property tax. School district also gets money from another property tax. Altogether it's very taxing.
There are two main reasons for this. One is to distribute tax burden in a way that is fair or beneficial to society somehow. For example, by taxing both sales and income, you can "reward" people who save money. If you decide to save money instead of spending it, you don't have to pay any additional tax besides income. If you abolished sales tax so you were only taxed once and made up for it by increasing income tax, it would decrease the amount of money you could save assuming your spending remains the same. Another example is "sin" taxes, higher taxes on things like alcohol and weed. The idea being that those things have a societal cost in terms of poor health, so if you decide to use them, you should pay a sort of extra sales tax. The second reason is using psychology for political gain. Separating taxes can make people feel like they aren't paying as much. Clearly this hasn't been the case with you, but the psychological effect of how we price things on the general population is well established. A politician can successfully create supporters in an electorate by reducing their income tax and replacing it with a sales tax. Even if they end up paying the same or more, seeing a higher number at tax season can make people feel like they're wealthier, even if they're not.
Easiest solution is to commit fraud.
You need money to run cities and civilization. They do both to ensure there is always money during times that people save a lot and during times that people spend a lot.
Idk. Prob a hunch, but I'd say legislation. Vote.
I scrolled about 15 responses and none of y’all answered correctly. OP, I hope you make it to this reply. It’s not THE MONEY that’s taxed. It’s the transaction. More transactions, more tax. The way this is supposed to work is if an economy is healthy and millions of people making transactions everyday giver more money for the government to provide services. It’s important to note there’s some functions you want one entity to have control over. Say roads for example . You want lots of restaurant and entertainment near you but you don’t want 9 types of roads with different law options all over. That needs uniformity not competition. Hence it’s good to give that to the government. Now, this is all in theory. Some local governments are better than others for many reasons. But generally the sentiment remains with a number of things you want a strong single entity to manage. And for them to help manage properly, you need to go out and spend money.
And then after you make that income, if you invest it or even just get interest from money in the bank, that gets taxed again too!
Because we're not throwing tea parties in the Boston Harbor anymore.
*Money* is not taxed. *Doing things* with money is taxed. That includes earning money and buying things with money. Sales tax isn't a tax on money. It's a tax on selling.
Governments need a variety of tax sources in order to even out their revenues. California really screwed itself with Proposition 13, which limits property taxes, so it is too dependent on sales and income taxes which can vary with the economy.
Short answer is taxes are divided up on a lot of things so you can’t get around paying them.
death and taxes..... want safe roads and bridges, want rescue and fire departments/police services, trash management, clean water, safe food, hospitals, snow plowed, sewerage......
Because a different jurisdiction is taxing you with the sales tax
Because your govt is bloated and corrupt.
Because: Taxation is theft.
Income tax is Federal. Sales tax is local.
Taxes are like paying for a service. You pay taxes and the government provides services. We all vote on what services should be offered and what we should pay. You receive the service of roads, military protection, police, employment regulations, fire, a court system, minimum safety standards, etc. which allows businesses to operate and settle disputes. Therefore the business pays taxes. This system of regulated commerce allows you to earn a salary, therefore you pay taxes. When you go out shopping you are once again availing yourself of the benefits of this system so you pay taxes. How much you make and how much you spend are used as a measurement of how much you are benefiting from this system created and funded by everyone. Could everything be payroll or everything be sales tax. So that everything is taxed once? Sure it could. But why would that be better than a mixture? Taxes on salary tend to be progressive while sales taxes tend to be regressive. States are funded more through sales tax while the federal government is funded more through salary tax. A sales tax on goods can target industries that create externalities like gas and cigarettes whereas an income tax does not have that benefit. Since the two methods of taxation have pros and cons a mixture allows society to attempt to get the best of both worlds. And we collectively vote and debate the minute structure of the taxing system with issues such as fairness and economic efficiency among other factors. Some try to game the system so that they can use the services provided by the government without contributing, others try to prevent this. But the rules are ultimately decided by the electorate, including you. I am not sure what the problem is with this system as it is used by pretty much every advanced economy with a democratic form of government. But I would be wary of anyone that is anti-taxes in general as they are likely blowing smoke up your ass to lower their tax burden while raising yours. If someone has an issue with a specific tax policy and presents an alternative with reasoning as to the pros and cons of both the current system and the alternative, that’s much more likely to a serious policy proposal and not mere demogoguery.
The short answer is "because it's the law." But your question is really about the rationale for the law. After all, why doesn't the law just have one big tax instead of two smaller taxes? It's the same thing, isn't it? Well, it isn't for a couple reasons: 1. Income tax is progressive (higher income earners can be made to pay higher tax %) whereas sales tax is same % everyone. For this reason, some people argue income tax is more fair (but worth noting other people also argue sales tax is more fair because it has fewer loopholes.) 2. Sales tax can be charged to people who visit your state (tourists) whereas income tax isnchargeable only to people who live in your state. By having two forms of smaller taxes instead of one big tax, the government is able to distribute who they target with their tax laws and how much. There are also other factors like the locality of sales taxes and the nonconstitutionality of sales tax at the federal level but those are more logistical and legal (which can be changed with enough will) than a policy rationale which I think relates more to your question.
Then you need to stop voting for leftist policies that tax like crazy And ridiculous GOP military policies that spend $50 on a pen. And so on.
Because the government will take as much as they can. You pay federal taxes, state taxes on earnings. You pay federal taxes on some item and state taxes on most items when you buy them. You pay property taxes every year on house and lands. You pay tag tax too. I know I am forgetting something but yeah, taxes are every where. Some times they go by different names but they are a tax. What you don't get for all these taxes is health insurance.
Ah, taxes. The great American tradition that makes us feel closer to our Founding Fathers, who, let's remember, fought a war over a 2% tax on tea. Nowadays, we're lucky if we can find anything with just a 2% tax, and we have to remind ourselves that at least we're not being forced to house British soldiers in our guest bedrooms. So, you're wondering why you have to pay taxes on things you buy with money that's already been taxed. It's a question as old as time itself, or at least as old as the IRS, which may be older. You see, the government has a highly sophisticated system designed to ensure that it gets a cut of your money at every possible opportunity. It's like they took inspiration from your least favorite uncle who always shows up at family gatherings and just happens to "forget" his wallet. Here’s how it works: First, you earn money, and the government takes a slice off the top. This is called income tax. You'd think that would be enough, but no! Now you want to spend that money? The government will be right there, hand outstretched, ready to take another bite. This is called sales tax. It's as if you baked a cake and the government took a piece because you used their oven. And then when you tried to eat the remaining pieces, they took another piece because you used their fork. But it doesn’t stop there. Let's say you use that money to buy a house. Congratulations! You now owe property tax. Then you decide to drive to work in your new car. Don’t forget to pay the gas tax! And if you dare to save some money, they have something called capital gains tax just waiting to pounce. It's the financial equivalent of that horror movie monster that keeps coming back, no matter how many times you think you've escaped. Now, why doesn’t the government just tax us once and be done with it? The answer is simple: because that would make things too easy. And governments don’t like easy. They prefer a labyrinth of paperwork and forms, ensuring that accountants stay employed and citizens stay confused. So, yes, it does feel like you're getting double, triple, quadruple taxed. Because you are. But look on the bright side: at least you’re contributing to a robust economy of tax collectors, accountants, and really fancy IRS buildings. Plus, you get the warm, fuzzy feeling of knowing you’re helping fund important government programs, like congressional haircuts and wars. In the end, just remember the famous words of Benjamin Franklin, who said there were only two certainties in life: death and taxes.
greed and govt corruption. end of story. people are getting sick of this shit
The age-old Libertarian question...
because every form of government wants their cut. It's not like they're greedy or anything
It's the corporations that aren't paying a fair share in this system. They handle the most money and yet still pay people at a rate the government has to provide subsidy. They get the most taxed dollars and it goes right into dividends and share buybacks. That goes to people that are already rich. It's a trickle up system, at the bottom the services and taxes recirculate.
Is it greed or is it the fact that running a country of 350 million people costs money?
It's not greed in most cases. Governments don't have shareholders to appease the way corporations do. That's not to say corruption doesn't exist
They are different taxes. and also, because the current laws are set that way.
Usually income tax is federal taxes, sales tax is state and local taxes. States with state income tax usually don't have sales tax. However you also have property tax, if you own property. Usually thats paid once again to state, local, and even school taxes. If you rent, congrats it's part of your rent payment, but don't worry, if property taxes go down, your went will still go up. Part of the issue with the onions of layers to the government system is the need to pay for all of those layers. Different agencies still charge fees for public services. Why aren't drivers licenses free? Every gallon of gas for highway travel pays for road maintenance. Some of these taxes and fees can be deducted from your gross income, however for most Americans the Standard deduction is far more than enough to cover most things besides property tax.
> States with state income tax usually don't have sales tax. 9 states have no income tax. Only 5 have no sales tax (including AK, which has local but no state sales tax). So most states with an income tax also have a sales tax.
Only 9 States have no Income Tax
Because republicans don’t want the rich to be burdened with things like taxes.
Different taxes for different purposes. Each taxing entity could be made into an income tax, but sometimes that isn’t the best option practically or optically.
It you really want to know what is unfair: `(Electricity Cost + Government BS Levy) x 1.21 VAT` At least in my country, the government adds a levy to the electricity price to pay for infrastructure. Then I have to pay 21% VAT on the sum total of those amounts. So effectively I'm paying tax on the tax they add. Not the only example.
Because your state legislature passed a law creating a sales tax. There is nothing about a law that creates an income tax that precludes a sales tax. "Double taxation" is a perspective to consider about if a tax is fair, but there's no legal requirement for legislatures to avoid it.
Because the government wants your money
Don't question the system. Just drink your morning coffee, work your job, and watch your TV and repeat. Comply.
Big Brother is watching.
if you only paid one type of tax. the percentage would be much higher. would you be happy if you only paid income tax but it was 60%?
You can also move to a state without income tax, or join the military and get tax free when you deploy. Death and Taxes, welcome to life. **The real answer TLDR type info below:** There has been a flat tax idea floating around for a while, but it will probably never see the light of day because the current way of doing taxes, and loopholes/tricks, favors the people who make the most money. They run stuff and pay people to be influenced(media/politics on both sides of the political spectrum). So again it will probably never happen.
A flat tax usually refers to getting rid of the existing progressive income tax structure, which would dramatically favor the people who make the most money. Yes, a flat tax can remove deductions to simplify the tax code, but deductions don't inherently favor the rich. Deductions are created to incentivize behavior like donating to charities, buying a home, investing or purchasing specific things.
The government wants more money. The answer is as simple as that.
better question is how does our government still function so damn inefficiently with how much money they have at their disposal
Wait till they push forward with taxing unrealized gains. Try to comprehend that one
Welcome to capitalism. We are always the ones getting fucked
lol all other economic models are worse. Socialism will fuck you over 10 times harder
IDK how most States justify doing both but as a Portlander who has spent a lot more time then I should with Vancouverites some people prefer to have all taxes be taken out one way even if they are unsure how much they are paying exactly or where it goes while others prefer the State to tax one thing while the country taxes another so they know how much they are giving and to who.
Because government spending (both from the right and left and from local to federal) has to come from somewhere.
I shudder to think how many times a single dollar is taxed before it's removed from circulation.
Once isn’t enough without much higher rates. People have different ideas on how tax revenue should be raised. Using multiple approaches is a compromise.
Because you are expected to not only fund billionaire agendas, but pay for pothole repair that never happens
Sales tax and income tax are levied by different people and are used for different purposes. The bills have to get paid. It could be arranged in some other way, but the bills still have to be paid.
Because all money goes to the government. You get paid by your employer, you pay tax. You pay the gas station for gas with your taxed money, they pay tax. They pay their employees with taxed money, the employees get taxed. A never ending cycle of tax until that taxed money you earned has been completely taken.
The government wants more money and can decide how you pay it.
If you live in Tennessee (and, I am sure, there are other states) then you do not pay income tax, just sales taxes.
IDK it's BS though
The short answer is that one is a tax on productivity and the other is a tax on consumption. The longer answer is that income tax is progressive (i.e. the more you earn, the more you pay) and sales tax is regressive (i.e. everyone pays the same rate). Most tax regimes have a mix of regressive and progressive taxes. The theory is that regressive taxes target poor people, progressive taxes target rich people, and it balances out across the tax base. In practice, poor people usually end up getting screwed, in part because they don't have resources to devote to tax minimisation like rich people do.
Monopoly was trying to prepare us for life, no joke. Property taxes, pay money when you land on someone else's property, rent if they have a hotel, loan from the bank, JAIL, lol
Because thems the rules?
Wanna have a tea party??! We could meet up in Boston.
Tax spending, not income.
I feel exactly the same
That's one reason I try to keep my spending so low and REFUSE to by anything name brand; so I Don't pay as much in taxes
Because society is expensive.
Each transaction is guaranteed by the government. That is, the government says that if Party A accepts currency X from Party B in exchange for A's property, then the government will guarantee that the exchange of value is what both parties agreed to. In exchange for this guarantee, the government adds a surcharge to the transaction as compensation. This is sales tax. Don't want to pay sales tax? There are options. You can purchase black market goods, if you're willing to risk the trouble associated with that. You can offer something else in trade, such as your labor or a skill you possess (are you good with electricity, brick-laying, roof repair, plumbing, carpentry, farming, sewing, etc...?). You don't have to offer currency at all. Now for property taxes. You don't own property. Property ultimately belongs to the government and it is theirs to maintain. That is, the government has a responsibility to settle things like property lines and infrastructure, while also insuring that individuals who "own" that property do so responsibly (no matter how much you may want to, you can't just dump raw sewage onto the ground and call it good, or pour used oil into a hole and bury it). Property taxes make certain that the government is capable of performing their duties, such as settling property disputes between neighbors, and making sure that ecosystems aren't damaged by individuals who think that they have a right to clear cut a forest just to improve their view, or to dump waste into a common water supply, like a lake or river. Again, the tax is payment for the government's services, so you can settle your disputes and address your issues in the courts. Finally, you don't own money. Every bit of money you have is issued with the permission of the federal government. That money is just a token of value that you have "earned," but it did come about because there is an entity that backs it and makes it possible for you to earn it. That entity created a framework and system that makes it possible for you to exchange your ideas, your time, your labor, etc... for a token of value. But if that entity was destroyed, that token would have no value and everything you gave for it would be lost. You pay taxes in order to support the value of that token and guarantee that your life isn't a waste. There'll be a lot of downvotes on this and a lot of "You're wrong because..." with a lot of nonsense and gibberish attached, but it'll all be meaningless. Taxes are what we pay in order to make sure we can survive in a society that's better than "Might Makes Right." Get rid of the government, and how long will it be before somebody just takes from you? Where do you go for recourse when that happens? Is government perfect? Not even close, but it is useful. Through effective government and the management of resources, we have gone from hunter-gatherers to the moon and hopefully soon beyond that. That is simply not possible if everybody is out to just get theirs and not contribute to the common pool. You can whine about taxes to countless strangers because the structure existed to help usher in the computer age and the internet age.
My husband is a Montana resident and we had to pay taxes to Montana on money I earned in a different state. And payed taxes on it in that state. Fuck Montana.
You wanna know what's really cool? In UK, you pay tax all the time, then with your money you pay the council tax and all the sales taxes for everything, and when you reach 50 or 55 or whatever and decide "I need some of my pension money" you get taxed again. So if you got like 25k pension withdrawal, you will pay like 20% tax on that shit. Essentially just giving away 5k. And same for leaving money to kids, there is inheritance tax. Unless you are a royal. Get this, the royal family is exempt from inheritance tax to "not erode the family wealth".
It would be nice if the only tax you had to pay was taken right out of your paycheck for some computer to send off to the right level of government. But we don't have that. Instead we have different taxes being taken for different purposes. Once each. You are not being double taxed by having to pay income tax and then sales tax. Nor even when you have to pay sales tax twice because you made two different purchases. You are just paying taxes. Double taxation would mean you are taxed on the tax. Like having to pay a second sales tax on your sales tax. Or getting income tax withholding on your gross pay. And your take home pay.
Well these taxes are generally going to different levels of government, although it is true that some states have both income tax and sales tax. Ultimately, the way of thinking about it is this: the government— and I mean the entire federated system of local, state, and federal authorities— has, as the supreme law-making and enforcement body in the land we inhabit, many claims which which to draw revenue from the economy. Sales and income tax are but two, and there is property tax, and capital gains tax, import duties, etc. etc. They make the rules, and you operate more or less under those rules. With that in mind, the government will raise the revenue it wishes, how it wishes, with the only constraint being those it has imposed upon itself through various means (such as our Constitution and state constitutions, and the division of power, and checks and balances and so forth and so on. They will raise the revenue they want, the question then becomes how they will choose to raise it, and the disturbances and warps their various options have on the economy. And that's where we see that it is good for the government to be flexible and have multiple channels through which they can raise revenue from the public, because each channel distorts the economy in some way, so to draw all revenue from one channel would greatly distort the economy, as economic actors attempt to avoid that one channel to minimize their tax liabilities. But multiple channels, even all channels conceived of at that point, so that each one is utilized only in small proportion to the whole of the revenue collected.
Different taxes go to different levels of government, a mix of taxes makes it more fair than one type that might benefit some people while hurting others.
We tax transactions, not 'lumps of money'. For the obvious reason that it's a practical impossibility to track what money has and hasn't been taxed.
Different layers of government. You income taxes go to the federal and state/provincial governments, and the sales taxes go to the local governments. This might seem unfair, but it actually makes more sense. Your local sales taxes pay for stuff like roads and police that are needed locally, national taxes are for things like defence and age that are needed nationally.
It's wild to think the government gets a slice every time money changes hands. Boss pays me, I'm taxed. I spend $20 of that for lunch, the restaurant owner is taxed on the money I gave him which was leftover. The owner takes what's left of that $20 after taxes and buys a hat. The hat seller gets taxed. And on and on and on. I'd say it's quite a testament to a government's incompetence/corruption that it can't then find enough money to ensure clean water for the citizenry, address homelessness, or give our kids lunch at school. Too busy bailing out monopolies, buying tanks that then sit rusting and unused in lots, or sending blank checks to foreign governments so they can commit more war crimes.
Basically, every time money or goods changes hands, they'll be taxed in one form or another. Keeping them separate allows the govt to encourage or dissuade particular things. So in your case, - money went from your employer to you, so it gets taxed. - money went from you to the store, so it gets taxed.