Here’s an idea of where the government can make more revenue: tax other layers of government.
Right now, state and local government enjoys paying zero taxes on property and buildings it owns, on energy it consumes, on facilities it operates. City halls, government buildings, prisons, parks, even enormous the beautiful buildings owned by the police and owned the Pentagon are currently untaxed. There is an enormous amount of government property thatshould be taxed, but currently isn’t — because of antiquated laws that prohibit government from taxing other layers of government.
Imagine for a minute if the State of New York was required to pay both local and federal taxes on the Empire State Plaza. For one thing, such a lavish building complex would have never been built. But even if was built, they would have used much cheaper materials, to avoid paying so much in local and federal taxes. Likewise, imagine if the City of Albany had to pay state and federal taxes on City Hall — it would have been long ago sold off to private developers — who would turn this beautiful old building into a hotel, conference center or dinning hall. Government would move to an efficient, non-descript building in a lower-cost part of the city.
Likewise, imagine if the City of Albany had to pay state and federal income tax on fines, property tax payments, other forms of revenue. The City of Albany would likely find it necessary to cut services, and find economies — as they would be making less money on each dollar they brought in. Yes, local property taxes and fines might increase to cover some of the cost of paying taxes to other levels of government — but also local government would shrink. Correspondingly, the state and federal governments could cut their taxes, because the federal and state governments would be collecting income tax on the city’s fines, taxes, and other sources of revenue.
Taxes are a proven method of reducing spending. At first it might seem silly for government to tax each other layer of government, but taxes on government spending will discourage more government spending, leading to a smaller, more efficient government. No more lavish government buildings, no more lavish spending on politicians or bureaucrats, just a government that is a lean servant of the people. The more you think about it, taxing government could not only lead to more revenue, but also less government.
Spend some time on Reddit or Twitter and you might be concerned that taxes are going up next year, thanks to a misunderstood chart from the Joint Committee on Taxation (JCT).
The chart, which was created in ecember 2017 when the Tax Cuts and Jobs Act (TCJA) was passed, periodically makes the rounds on social media because it seems to show that people earning between $10,000 to $30,000 begin paying more in taxes on average starting in 2021 than they would have before the law was passed.
A major cost of living in New York State is taxes. We have very high property taxes, but then again does much of New England. The median property tax bill in Albany County, NY is $4,200, while the median property tax bill in the mountain country of Webster County, WV is $268. In much of the south, especially away from the oceans and metropolitan areas, property taxes are much lower then in our area. You can understand why many people, especially seniors to choose to move to lower tax states.
Those making $50,000 to $100,000 for example, paid just three-fourths of 1 percentage point less of their incomes to our federal government. People making $2 million to $2.5 million saw their effective tax rate fall by about three times that much.
Now let's compare two groups, those making $50,000 to $100,000 and those declaring $500,000 to $1 million. The second group averaged nine times as much income as the first group in 2018.
Under the Trump tax law, the first group's annual income taxes declined on average by $143, while the second group's tax reduction averaged $17,800. Advertisement:
Put another way, a group that made nine times as much money enjoyed about 125 times as much in income tax savings.
This disparity helps explain Trump's support among money-conscious high-income Americans. But given the tiny tax benefits for most Americans, along with cuts in government services, it is surprising Trump enjoys significant support among people making less than $200,000.
Now, you may be wondering, can I deduct my next visit to a salon or a barbershop?
The U.S. Tax Court has repeatedly ruled that the costs of maintaining an appealing appearance are not deductible, even for public personalities. In a 2011 case, the court ruled against a television news anchor who wanted to claim deductions for the costs of maintaining her personal appearance.
