Quit sending them here!
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Several red states lowering income tax rates, with the goal of eliminating them. Economic activity has been moving away from high tax places like CA, IL, NY, NJ to other states, making it an economic windfall for the states receiving over taxed good income arrivals.
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If only SC would hop on that bandwagon. At this rate, NC (Dem gov, veto proof Republican legislature) is putting their southern neighbor to shame … until you get to retirement earnings.
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The agency is making an effort to showcase positive results from its burst of new funding under President Joe Biden’s Democratic administration as Republicans in Congress look to claw back some of that money.
They’re making an effort to showcase how they aren’t coming after the common man.
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That comes next, after they run out of Republican donor millionaires to target. The way they’re spending money, the middle class is the only one with enough taxable income to matter. You could take 100% from the top 5% and it wouldn’t be enough.
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IRS leaker to be prosecuted.
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The new federal income tax brackets for 2024.
10%: Income up to $11,600 ($23,200 for married couples filing jointly)
12%: Income over $11,600 ($23,200 for joint filers)
22%: Income over $47,150 ($94,300 for joint filers)
24%: Income over $100,525 ($201,050 for joint filers)
32%: Income over $191,950 ($383,900 for joint filers)
35%: Income over $243,725 ($487,450 for joint filers)
37%: Income over $609,350 ($731,200 for joint filers).
Taxable income, remember, is your gross income minus the various tax breaks for which you’re eligible.
For individuals and married people filing separately, the new federal standard deduction next year will increase to $14,600, up from $13,850 this year.
For married couples filing jointly, the standard deduction will rise to $29,200, up from $27,700 currently.
And for people who file as head of household, the standard deduction will be $21,900, up from $20,800 today.
https://www.cnn.com/2023/11/10/success/irs-new-income-tax-brackets-inflation/index.html
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Vote with your feet. New data on taxpayers moving between states show taxes are a major consideration and that low tax states offer better economic opportunities due to the correlation between low tax rates and other pro-economic government policies.
“The IRS data show that between 2020 and 2021, 26 states experienced a net gain in income tax filers from interstate migration—led by Florida (+128,228), Texas (+82,842), North Carolina (+40,828), Arizona (+32,636), and Tennessee (+30,292)—while 24 states and the District of Columbia experienced a net loss—led by California (-158,220), New York (-142,109), Illinois (-53,910), Massachusetts (-25,029), and Louisiana (-14,113),” write Yushkov and Loughead.
“Consistent with last year’s version of this publication, it is clear from the 2020-2021 IRS migration data that there is a strong positive relationship between state tax competitiveness and net migration,” they add. “Overall, states with lower taxes and sound tax structures experienced stronger inbound migration than states with higher taxes and more burdensome tax structures.”
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I think that is especially a consideration for retirees. I’ve got relatives who are now technically Florida residents even though they only stay there the minimum amount of time to qualify for residency (180 days during the winter). I think this is why we also see a general migration towards the southern states. Definitely my relatives were looking at Arizona, Texas and Florida due to taxes but as you may infer, winter climate also had a large impact on the decision.
But if tax was the main consideration for most people including innovators, California would be deserted and states like South Dakota or Wyoming would have huge populations compared to their size.
On top of that, there is the issue of state subventions/tax breaks for industries. So it’s feels suspicious for me to claim that one thing is the main reason for migration and ignore the states where that logic doesn’t add up. That said, with more jobs being remote, picking low-tax states for residence -when you could do your job anywhere in the country - certainly makes sense and could be enough to move the needle.
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The new 1099-k reporting limits delayed yet another year. Because, why not.
The IRS now says the limit for reporting will be $5,000 in 2024, and $600 in 2025. At least this time they’re pretending to try to follow the law.
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Definitely true, but I expect it to be a medium term (<20 years) trend, mainly because these refugees from high tax states bring their high tax mindsets, and voting tendencies with them. It won’t be long before their infection influence swings the needle to the tax and spend side of governance.
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That’s possible although is the migration that significant to challenge the majority in the southern states. Plus 20-yrs later, they’re 20 years older and older folks tend to be more conservative. Of course that may be moot with the current significant migration into these southern states from outside the country. In 20 years, these immigrants will have had kids who are now American voters and I don’t know where they’ll fall on the political spectrum.
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This could be a roadblock on the Democrats’ dream of a wealth tax.
- The Supreme Court on Tuesday is hearing oral arguments for Moore v. United States, a case that could affect broad swaths of the U.S. tax code.
- The case involves a Washington couple who own a controlling interest in a profitable foreign company affected by a tax enacted via former President Donald Trump’s 2017 tax overhaul.
- The ruling could affect future taxation of so-called pass-through entities, such as partnerships, limited liability corporations and S corporations.
While the 16th Amendment outlines the legal definition of income, the Moore case questions whether individuals must “realize” or receive profits before incurring taxes. It’s an issue that has been raised during past federal “billionaire tax” debates and could affect future proposals, including wealth taxes.
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It doesnt really matter. They’ll [try to] pass it anyways, along with all the spending to be funded by the extra revenue, and by the time it gets declared unconstitutional they’ll have already spent the money. So they’re happy either way.
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another good article in the upcoming case regarding realizing taxable income.
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Without discussing merits of the case, I think I’d prefer if the SCOTUS deemed the tax constitutional. Just so this does not open up even more loopholes than there are already in the tax code, especially for pass-through entities and LLCs.
Simply because I don’t see this Congress being able to pass an improved tax code any time soon and these extra loopholes would only mean lower revenues and thus even greater deficits than the clowns on both sides have already been running for years in complete impunity. Except this time, they would totally blame ALL the budget deficits on this change, ignoring the toxic mix of low taxes and high spending that has lead to most of the current national debt.
Have you thought through how a wealth tax would be implemented? Say you had 100 shares of stock in a company and it went up $100 this year. You would pay tax on the $100. The next year It goes down $200? Does the government return money to you?
Wealth tax has been tried in Europe and repealed because it led people with big money moving out of the country. This year, Jeff Bezos moved out of Washington state to the free state of Florida to escape a tax on his fortune by Washington state.
Your tax loophole is my tax cut.
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I appreciate your take on this. Please consider the alternative - the tax is declared constitutional and politicians can’t blame budget deficits on this ruling. How will that change anything? I’m not being facetious. Politicians haven’t had this excuse for 50 years, but have continued to tax and over-spend like it doesn’t cost anything, or not tax, but still over-spend.
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That’s fair. Although I don’t think it was quite that bad 50 years ago. We had budget surpluses some years and debt-to-GDP ratio decreased up to the early 80s (to 40%). Actually, even as it crept up, the debt-to-GDP ratio was not that bad up to 2007 (45%). Since then at each financial hardship, we’ve just gone massively off the rails with unpaid for subsidies to anyone with a pulse. Basically the equivalent of a household living paycheck to paycheck with no emergency savings. At each bump on the road, they run up their credit card debt to pay for the unplanned event, and never pay it back.
But even then, if you assume - correctly IMO - that tax reform, government spending, and budget balancing are not going to happen soon whether the law is deemed constitutional or not, then shouldn’t that be a reason to want the law to be constitutional so at least we don’t further erode the already insufficient tax revenues?
The case in question here was about forced repatriation of foreign business profits from an investment done over 15 years ago. How long would you deem it reasonable to defer tax on foreign business profits of Americans investing abroad? Forever as it was before the TCJA of 2017?
Now if realization requirement was broadened from the foreign repatriation feature, that could prevent the implementation of a potential wealth tax. But I’d be cautious about this leading to potentially undesirable changes for investors and business owners, starting with the step up basis on death provision to prevent the lack of realization to go on forever.
Well, tax loss harvesting and capital losses carryover can be used to offset capital gains. And there are similar provisions for LLCs in which you can carry forward net operating losses forever to offset future gains. To me that sounds close enough to the government returning your money, albeit in a potentially slightly delayed fashion.
I want laws that are fair, not merely convenient.
Living tax-free by borrowing against unrealized gains is a big loophole. Step-up basis on inheritance is another. But taxing unrealized gains just does not compute. Maybe refundable tax credits for unrealized losses would make it a little better, but still must consider the fact that investors may be forced to sell assets and realize gains to cover their liabilities for both realized and unrealized gains. Such refundable tax credits should be capped, but it’s difficult to make it fair.
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