View Full Version : Income Tax AND Sales Tax
Teufelhund
06-11-2012, 14:54
When you earn a dollar, you pay the State of CO tax on that dollar. When you spend that same dollar, you pay the State of CO tax on that dollar again.
Being from Texas, where there is sales tax but no income tax, and having only lived in Colorado for four years, I still do not understand how this double-dipping by the State is fine with everyone. Can someone clue me in?
When you pay a fine, fee, or ticket to the government, you pay taxes on it so the government can take a share of a financial transaction. Why does the government need a share of a payment being made directly to them?
Teufelhund
06-11-2012, 15:02
Great question, Irving. I'd like to know the answer to that as well.
Sales taxes paid can be taken as an income tax deduction in many cases. This is why an accountant is worth the money. H&R Block, etc. Often overlook this type of deduction. You also need to have good records of exactly how much sales tax you paid (Quicken, Quickbooks, or similar).
Zundfolge
06-12-2012, 20:45
points to Nietzsche quote in sig
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v
KestrelBike
06-13-2012, 06:30
The sales tax you're paying is paid on behalf of the merchants you're buying from. They have to pay taxes on the goods (not services!) they've sold you, but they pass the privilege on to you. They also have to pay employer taxes, some states have corporate taxes (CA, for instance, has a mandatory $800 annual tax no matter what your annual revenue is).
My memory now starts to get a bit fuzzy, but perhaps depending on the size of their sales receipts, the merchants have to deposit the sales tax collected weekly/monthly/yearly.
Basically, everything is taxed, and everybody and their mother looks for a way to punt those taxes on to someone else.
As TFogger said above, Sales Tax is a line item on your Sch A Itemized Deductions on your federal 1040, but you really have to pay a ridiculous amount of sales tax for it to make a difference on pg2 of your 1040. The standard deduction (you typically only itemize if you pay property taxes or mortgage interest on a house) already figures the state sales tax that you've paid during the year.
Disclaimer: IMO The current Federal and State taxation is absolutely ridiculous and it favors the rich who can afford expensive accountants to figure out the tax code. I think that if the country's average citizen cannot understand the tax he/she must pay, you shouldn't make them pay it. I'm sure there's faults in that logic, but come on, look at this link: http://www.irs.gov/pub/irs-pdf/i1040sca.pdf Go to page 4. This is just for 1 damn line on one of many sub-sections of an individual tax return. Figure out a flat tax for Every working citizen. Guess what, government? There's your yearly revenue from the people. That's all you get to spend.
They see it as free money when its passed from one person to another. And they like to take their piece whenever they can. I don't understand sales tax being charged on cigarettes @ $40 when 75% is taxes already. If only we could get that kind of freebies. Buy 25 bullets get 75 for free then add .0762% more bullets on top of it at the register.
When you earn a dollar, you pay the State of CO tax on that dollar. When you spend that same dollar, you pay the State of CO tax on that dollar again.
Being from Texas, where there is sales tax but no income tax, and having only lived in Colorado for four years, I still do not understand how this double-dipping by the State is fine with everyone. Can someone clue me in?
its just another way to pay, or attempt to pay the state's bills.
every state has a unique combination of sales tax %, property tax rates, income tax %, ect.
I'm orignally from Colorado and moving to Texas. I gave up trying to figure out why I have to buy a "membership" at some bars/towns to drink... its just a form of taxation to help Texas pay the bills.
flat tax on sales is the only correct way to be taxed
Teufelhund
06-13-2012, 09:36
its just another way to pay, or attempt to pay the state's bills.
every state has a unique combination of sales tax %, property tax rates, income tax %, ect.
I'm orignally from Colorado and moving to Texas. I gave up trying to figure out why I have to buy a "membership" at some bars/towns to drink... its just a form of taxation to help Texas pay the bills.
flat tax on sales is the only correct way to be taxed
Every state does property tax (I think), but most states have either income tax OR sales tax, but not typically both. Is there another state besides CO that does both?
Welcome to the bible belt BTW. I see you're near Dallas. I grew up near Galveston, but I lived in Plano for about 7 years before moving to CO. Have a great time in the triple digit heat and 100% humidity!
Every state does property tax (I think), but most states have either income tax OR sales tax, but not typically both. Is there another state besides CO that does both?
Welcome to the bible belt BTW. I see you're near Dallas. I grew up near Galveston, but I lived in Plano for about 7 years before moving to CO. Have a great time in the triple digit heat and 100% humidity!
im too lazy to do much research on it, but this site has a few maps that show some tax rates differences.
http://www.mymoneyblog.com/state-tax-rate-maps-how-does-your-state-compare.html
i cant wait. we are jumpin in feet first for a drastic change. we didn't want to live in one area our entire life.
D7KSkZxt_zo
Whistler
06-13-2012, 10:33
Every state does property tax (I think), but most states have either income tax OR sales tax, but not typically both. Is there another state besides CO that does both?
Welcome to the bible belt BTW. I see you're near Dallas. I grew up near Galveston, but I lived in Plano for about 7 years before moving to CO. Have a great time in the triple digit heat and 100% humidity!
North Carolina and Indiana do or did when I lived there.
Teufelhund
06-13-2012, 10:39
I'm too lazy to research it too, that's why I asked here haha. I was waiting for someone to be a dick and drop the obligatory lmgtfy link.
The only thing I miss about Dallas is that it has the highest number of hot chicks per capita of any place I've ever been or heard of. Huntington Beach, CA is a close runner-up though. Have fun!
BlasterBob
06-16-2012, 06:52
When we buy fuel, a good portion of the amount paid is for taxes. I am amazed that they don't TRY to collect sales tax on each sale (unless that tax IS already included with the various taxes charged - State, County & City)
When we buy fuel, a good portion of the amount paid is for taxes. I am amazed that they don't TRY to collect sales tax on each sale (unless that tax IS already included with the various taxes charged - State, County & City)
if i had to bet they build it in.
http://www.api.org/Oil-and-Natural-Gas-Overview/Industry-Economics/~/media/21EBD0B62EBA42B1965EE82EFFB6585D.ashx
according to this site we pay $.40 in taxes PER gallon. [Rant1] some of those nanny states ~$.70 a gallon. so ridiculous
The simple answer is the government constantly comes up with ways to spend more of your money better than you can.
An interesting item when you think about it is that while incomes, and prices have risen since the mid 60s, if tax rates had stayed the same the government would have increased revenue, instead they raised the rates too. 20 years ago only a few states had sales taxes over 6% now that is average with many closer to 8. Property tax rates have increased too, while we buy bigger and more expensive homes.
It is ridiculous and they won't stop. I am convinced that any time 99% of the people get together to spend someone else's money they cannot restrain themselves. I have been on boards and committees and usually talk of cutting spending or doing things on the cheap is shot down.
The only way to shrink the government is to starve it. I think during the Clinton era, a study claimed that government spending increased $1.03 for every $1.00 increase in revenue.
Sales Tax varies widely by municipality also. I live in unincorporated Douglas county, surrounded by Parker on three sides. If I shop in Parker, and ALL the retail is in Parker, I get to pay:
2.9% Colorado State
3.0% Parker
1.0% Douglas County
1.0% RTD
0.1% Scientific and Cultural Facilities District sales and use tax
-----
8.0%
What an ass rape. I know we're supporting the general public, but personally I've never been on any RTD vehicle and never set foot in any county "cultural facility." I don't even get to reap a regular benefit of keeping all those bus/rail riders off the roads as I work from home or commute to DIA. I also don't receive any Town of Parker services at my home.
Thankfully, large purchases like vehicles, etc. are excluded from the Parker tax. I will also add that my property taxes here, on housing that is generally 3x the cost of the Midwest where I came from in '92, is 1/2 as much. However, most of those markets have more city services (trash, etc.) that are privatized here.
I get to pay income tax, tax on my fuel, tax on my food, tax on my boolits if I buy at Wally.
Only one year when I made some significant vehicle purchases did I have enough retail spend to take the sales tax deduction.
That said, Colorado is a great place to live and I can't see myself living anywhere else.
Source (https://www.colorado.gov/revenueonline/_/#2)
PARKER:
The city sales tax rate is 3.0%. Please note that this is a Home Rule City. The Colorado Department of Revenue does NOT collect sales tax for home rule cities. Parker is in Douglas County.
DOUGLAS COUNTY:
The county sales tax rate is 1.0%. The Lincoln Station Local Improvement District near Interstate 25 on Park Meadows Drive has a sales tax of .5%. The northeast portion of Douglas County, Highlands Ranch, the Park Meadows Mall area, Lone Tree, Acres Green, and Lincoln Station LID are located in the Regional Transportation District, which has a sales and use tax of 1.0%. The Scientific and Cultural Facilities District sales and use tax of .1% applies to all of Douglas County except in the towns of Castle Rock and Larkspur. Douglas County also has a 1% sales tax on property rented for thirty days or less, excluding motor vehicles.
theGinsue
06-30-2012, 21:19
I've gotten into many a heated argument with coworkers who AGREE with tax increases. They don't understand the logistics of how more income floating around to spend already guarantees the .gov (all levels) more revenue.
By increasing tax percentages, you reduce the amount amount spendable $ and thusly reduce the potential tax revenue.
Simple math really (especially if I can understand the concept).
hammer03
06-30-2012, 22:04
I haven't figured out property tax. I didn't buy my home from the .gov, I didn't get my loan from the .gov, what justifies the .gov from taking money from me, and if I don't pay that money, they can take the house that they don't have any legitimate financial interest in?
CA also has income and sales tax, if that surprises anyone. And they are still broke as shit. Great example of taxing people out of their ability to help anyone.
I haven't figured out property tax. I didn't buy my home from the .gov, I didn't get my loan from the .gov, what justifies the .gov from taking money from me, and if I don't pay that money, they can take the house that they don't have any legitimate financial interest in?
CA also has income and sales tax, if that surprises anyone. And they are still broke as shit. Great example of taxing people out of their ability to help anyone.
I'm no economist and while there are many examples and much deeper logic than most of us understand, perhaps you do not have kids that attended public school, or a need for police, fire, or emergency medical services?
If you have zero income, and zero spend, you're still entitled to those services.
I know, I know, sounds liberal, but it's just the basics of our (democratic?) society.
hammer03
07-01-2012, 17:41
I'm no economist and while there are many examples and much deeper logic than most of us understand, perhaps you do not have kids that attended public school, or a need for police, fire, or emergency medical services?
If you have zero income, and zero spend, you're still entitled to those services.
I know, I know, sounds liberal, but it's just the basics of our (democratic?) society.
So people who don't own their home aren't entitled to those things?
I just don't like the connection to the real estate. If I own two homes, am I entitled to twice as many benefits? If I rent, is my landlord entitled to those things but I am not? I get that it has to be tied to something, and that by connecting it to housing they guarantee getting paid. Just frustrating I guess.
If you buy an electric car (and therefore don't buy gas) do you have to pay tax for using the roads? I know people using veggie oil are supposed to keep track of how much they use and pay the gov for it, but haven't heard of the same issue for electric or hybrid cars.
I love how I never use those services but I have to pay for them anyway.
So people who don't own their home aren't entitled to those things?
I just don't like the connection to the real estate. If I own two homes, am I entitled to twice as many benefits? If I rent, is my landlord entitled to those things but I am not? I get that it has to be tied to something, and that by connecting it to housing they guarantee getting paid. Just frustrating I guess.
If you buy an electric car (and therefore don't buy gas) do you have to pay tax for using the roads? I know people using veggie oil are supposed to keep track of how much they use and pay the gov for it, but haven't heard of the same issue for electric or hybrid cars.
Whomever resides at the property is entitled to those services. I guess it's the property that carries the entitlement, doesn't mean sh*t who paid the taxes on it. I'm not disagreeing with you in principal, just stating another possible point of view.
I think my premise indicated that we all help support the entitlements of others through our socialist-like Democratic government. If it means anything, you are "entitled" to take an income tax deduction for the property tax you paid to the state since you've already paid some form of fed and/or state income tax on that money.
Colorado hides part of their road use tax in the "ownership tax" we get to pay EVERY YEAR (also deductible on fed income tax) and is also now collecting road and bridge fees (and higher reg fees) thanks to that POS former Gov Bill Owens. It's all not just collected through fuel taxes. I pay taxes on my electric bill too, so if I was some idiot with an electric car (save your personal fuel costs if you like but don't claim it's saving the planet or using less carbon), I would still pay taxes for charging the damn thing.
I'm all for a flat sales tax, although I would likely take it in the shorts because I'm a spender and not a saver. :D
If there was a flat sales tax people would see what they are charged and demand blood. If you got to keep all of your money and only paid taxes when you spent it there would be a 60% sales tax added onto every dollar you spent.
Maybe more.
How much spending do you think would be going on if that was the spanking you knew you'd get?
Where are you getting this 60% tax rate number from?
If you take all the taxes that you pay on a dollar that you earned. 25% income tax, ~8% sales tax with all the hidden taxes. It hovers at about 60%. I did the math a few years back but I don't remember what it was right now.
Not sure I understand the math. Flat sales tax (FairTax (http://en.wikipedia.org/wiki/FairTax)) means no other income taxes and calls for, generally speaking, a 23% flat rate sales tax across the board.
They can't live on that. Or I mean they don't want to.
hammer03
07-02-2012, 19:20
So are people with $600k homes entitled to twice as much emergency care as someone in a 300k house?
Still just bitter. No need to answer that...
So are people with $600k homes entitled to twice as much emergency care as someone in a 300k house?
Still just bitter. No need to answer that...
No, but I betcha anyone in a $300K+ home gets faster response than someone in a $40k home. Just saying...
Aloha_Shooter
07-03-2012, 00:18
I think MOST states have both income and sales taxes but the intent originally was to strike a balance. The problem I have is that both tax rates have risen over the years. When I first moved to Colorado over 20 years ago, sales tax was about 5%, now it's 7.1% in Colorado Springs and I can't see a lot of improvement for the additional 1.1% (the 1% for TOPS does seem to have had a positive effect on our park spaces).
In contrast, I paid 7% sales tax in Florida and no income tax at all. In Hawaii, income tax was punitive but sales tax was under 5%. I think income taxes were moderate and sales tax was about 5% in Virginia. Then there's Kalipornia with punitive income taxes AND sales tax around 10%.
I used to be in favor of consumption taxes as a way to encourage savings instead of our current spendthrift economy but it's far too easy for Congress to increase the sales tax incrementally until we're at European levels. If we start at 17%, someone will surely propose raising it to 18% (it's just 1% more, do it for the children!) -- and John and Jane Q. Public will buy the argument that it's such an incremental increase that they won't even notice.
At the moment, I prefer the option of a Flat Tax but I want to see a 67% supermajority requirement to raise rates -- 75% would be even better but is probably unachievable.
Sales tax would be better if I had to pick one. That way you only get robbed when you are going and not when you are coming. But they get us coming and going and its not just for the children. They have the arts to support and unions too.
One time I saw a really interesting piece on how much your dollar is taxed in it's lifetime. It was pretty eye opening and if I recall it ended up being that when you earn a dollar that you end up paying about $0.75-0.90 of that in taxes. Income tax takes a bite, then the sales tax (and possibly double and triple sales taxes depending on what you did with that dollar), then every other stupid taxes from RTD to a cigarette tax to gas taxes.
If only the government sold stock. I'd get together with the rest of the country to buy it back.
I like the Denver head tax. Its a tax you pay for the privilege of working in Denver in case you don't live there too. You live someplace nice without the crime and hippies of Denver. But you get charged it even if you live in Denver and nobody knows or cares how to remove it if you do. Its just a special tax that only Denver has and was sold to people under false pretenses.
Goodburbon
07-03-2012, 08:29
government workers pay income tax and sales tax. Explain how it makes sense to take money from people you just "paid" way more money to. It's a numbers game. you claim it as income tax, when in fact you just paid them less.
And it's more than just what you mention in the OP
You earn a dollar, the state taxes it, the feds tax it, the feds take more for "medicare", the feds take more for "fica", the feds take more for "social security", then you get what's left over.
Then you go to spend it and your municipality, state and county take another 8-10%
And heaven help you if you ever have the nerve to earn money by investing your dollars.
OneGuy67
07-03-2012, 08:59
If only the government sold stock. I'd get together with the rest of the country to buy it back.
I like the Denver head tax. Its a tax you pay for the privilege of working in Denver in case you don't live there too. You live someplace nice without the crime and hippies of Denver. But you get charged it even if you live in Denver and nobody knows or cares how to remove it if you do. Its just a special tax that only Denver has and was sold to people under false pretenses.
Not just Denver. Other municipalities have it too, Greenwood Village comes to mind. $2 a month head tax for anyone who works in the city limits of GV. If I remember correctly though, Denver's head tax is something like $9 a month?
wait til we get taxes like canada's, my in laws. its hilarious. theres like a 25% tax already in the item. so if the gum would normally be $1.00 it is listed as $1.25. then they have a "tax" on the item when it sells. they are pros at double dipping.
Well all of this tax stuff drives me crazy because so much of the money is wasted on bullshit I can't even believe it.
Rant Start:
The other night at work some enormous creature posing as a female (nearly 400 pounds) called 911 and stated that she was being assaulted. So of course I haul ass over there and there is no one to be found except her, in her comfy chair. She says that the "fight" occurred earlier in the day but she wanted the cops to come fast. She stated that she was very upset that her food stamps had not come in yet and she can't live without her $500 monthly check for food stamps had not come in yet. I was thinking to myself, "Shit that's a lot of money considering you live alone. I don't spend that much on food per month for my wife and me. Then she says that she was smoking her medical marijuana that is FULLY FUNDED BY THE GOVERNMENT to assist her in not feeling lonely. The government additionally pays for her apartment, transporting her, and her god damn cell phone. She additionally has "spending money" left to ensure a decent quality of life. Long story short she was told if she calls again she will get a false reporting charge but I walked away thinking how completely fucked up our government is that this tub of lard who doesn't work, doesn't contribute a damn thing, and nets as much income per month as I do. [Rant2]
Rant Concluded.
jerrymrc
08-14-2012, 20:34
$500 monthly check for food stamps The wife and I get by and eat well on $200 or less a month. When certain things go on sale we stock up.
We also do not need to spend $40 on organically grown, harvested by downtrodden ex crack-hoes that need a better life for there 12 children and shipped by Eco friendly volunteers driving a wave of toyota prius's handing off in 20 mile increments to use only battery power (that comes from a coal fired plant) on the vegetable for the meal.[Flower]
The wife and I get by and eat well on $200 or less a month. When certain things go on sale we stock up.
We also do not need to spend $40 on organically grown, harvested by downtrodden ex crack-hoes that need a better life for there 12 children and shipped by Eco friendly volunteers driving a wave of toyota prius's, that have already done 2 million miles before hitting the road, handing off in 20 mile increments to use only battery power (that comes from a coal fired plant) on the vegetable for the meal.[Flower]
Fixed it fer ya.
Not just Denver. Other municipalities have it too, Greenwood Village comes to mind. $2 a month head tax for anyone who works in the city limits of GV. If I remember correctly though, Denver's head tax is something like $9 a month?
Denver head tax is $5.75 every other month. I've paid $46 this year for the priviledge to work in Denver. Boy do I feel honored.
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