I still believe housing is the biggest reason, and that state income taxes are not a major cause of the move for the middle class. I just went slightly OT with my suspicions that the “middle class” that moves may not realize that just because housing may cost half as much somewhere else, it doesn’t mean their total expenses will also be cut in half.
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I’ll bet the biggest reason is the total cost of living, regardless of how it breaks down between housing, taxes, and other stuff.
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That and job opportunities
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It’s not regardless though, because those articles suggest that state income taxes are the cause. But “the middle class” doesn’t pay much, if any, state income tax, so it’s unlikely to be the cause.
California’s unemployment rate is almost the same as Texas and Arizona, so it’s probably not the reason to move to those states for “the middle class,” but could be a reason for going elsewhere.
define “middle class”
define “pay much.” does this only include state income taxes?
The state taxes I have experienced is basically a flat tax based off your federal agi, with only a modest standard deduction. Proportionally, the middle class pays as much as anyone else.
Good news. But more Democrat fraud.
Wasn’t this new reporting requirement a key part in raising the revenue that allowed them to use a reconciliation vote to pass whatever handout package it was part of?
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Read the article in question. It acknowledges this.
California uses brackets, so it’s similar to federal in the sense that it’s not a “flat tax” (but the brackets are different).
That wasn’t my question, but I can understand your confusion. My question is what is “your” definition of “middle class” and “your” definition of “pay much”. Is it exactly the same as quoted as in the article?
In this case, yes, since they didn’t define it in the articles.
Generally speaking there are multiple commonly-used definitions, and they all surround the median income. Median household income in CA is ~80K, and my quick estimate for the state income tax liability is a few hundred dollars, but could be closer to $0 depending on deductions.
in the dose lies the poison
We’re doing a flat tax in AZ 2.5% next year, hope they auto adjust withholding, so one less form going forward. I wish we would go the property tax route like TX/FL, much less onerous and I would just buy the smallest house in nicest area to “manage” it.
Wait - so Congress was going to delay the $600 limit in a year-end bill but failed to do so, so the IRS delayed it anyways?
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agency rule making at it’s best!
The problem with all this is that the congress would still have to act to guarantee that people that received less than 20,000 don’t get a 1099-K. That’s because payment processors have already had the ability under the old law (and therefore still do under the new law) to send out 1099-Ks to people for any amount. I’ve received one and I know personally of several other people with modest ebay activity that have received them in the past for way less than $20,000
By delaying the $601 requirement, nothing changes. Hundreds of thousands of people without businesses are still going to get 1099-Ks next month, because they got them last year. In order to stop that, not only would the IRS have to promise not to enforce the $600 rule, they would have to tell payment processors there will be consequences if they DO send out 1099-Ks to people that fall under the old floor of $20,000. Since that’s not the law, the IRS can’t do that. This is all meaningless.
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Yes, but companies that have not sent such 1099-ks thus far will likely skip it again this year when being given that option. So a lot of the extra burdon will be avoided. Either way, the law is what it is, and the IRS is simply deciding they don’t like the law and ignoring it. It shouldn’t be allowed, and there should be consequences for those making the decision. Especially when there (supposedly) were efforts to repeal the law that failed.
“Lots of confusion”
It’s the IRS’s job to deal with the tax law, not dodge it.
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Tax loss harvesting. the last minute is here, and depends slightly on the settlement dates if you’re down on your shorts (tough to do this year, i know).
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Retirement plans changes and new options for Roth SEPs, longer til RMDs, and the like.
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Let’s keep the politics mostly elsewhere, but the Democrats eventually won the release of Trumps tax returns which they promptly publicized. He paid little most years due to RE depreciation but $1M at some point when his taxable income swung from -$20-30M to +$20M.
Link to the returns (I think)
I won’t disagree with this
Ways and Means Committee ranking member Rep. Kevin Brady, R-Texas, contended Democrats unleashed “a dangerous new political weapon” by releasing the returns.
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A number of states moved to the $600 reporting requirement for 1099-K over the last few years, so for those states the federal change is essentially moot.
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