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Capital Gains Taxes On Real Estate Sales Chesapeake Virginia Article
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Variation in Sales Taxes in the United States
from:All but six states in the United States—Alaska, Delaware, Hawaii, Montana, New Hampshire, and Oregon—levy sales taxes in the United States on purchases. The amounts each state charges vary with some states even having a local sales tax in addition to a state sales tax. In some states the addition of the local tax can make the tax extremely high such as in New York State where the sales tax is only four per cent statewide, but in New York City, the combined tax is 8.375 per cent.
In addition to the percentages that the states charge, another difference lies in what is subject to sales tax. In some states sales taxes in the United States include everything you purchase, while others exempt medicines and non-prepared food items. In Pennsylvania, clothing and most footwear are also exempt from sales tax in the United States. Once considered a fairer system than that of the state income tax because those who were lower income and bought less paid according to their income level (meaning that they only bought what they could afford) many states now charge both sales tax in the United States and a state income tax. Delaware has attempted on several occasions to pass sales tax legislation, but the bills have been defeated because of the state income tax.
The problem that exists, however, with sales tax in the United States is that although this tax along with state income tax is a deduction from your Federal Income tax, only those who itemize deductions can take advantage of it. Thus, unless you are a homeowner still paying on a home, you will not have enough deductions to itemize since you need to have deductions that exceed your standard deduction in order to itemize. For example, if you are married filing jointly, your standard deduction is $10,300, so you must have itemized deduction higher than that in order to claim those deductions. Thus, in reality, sales taxes in the United States are not balanced taxes since many lower income people must pay it with no opportunity for a refund, especially in states where everything is taxed.
What is the answer to the sales tax dilemma in the United States? Should the states eliminate sales taxes in the United States and deal strictly with a state income tax or vice versa? Maybe there should be a special credit on the Federal return that people can claim whether they itemize or not. Of course, that will not help those with no taxable income, but there is no provision that will be equitable for everyone unless we eliminate both taxes, which will leave the states insolvent.
Capital Gains Taxes On Real Estate Sales Chesapeake Virginia News
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