Republicans always favoring the rich...hmm

Runner_Guy said:
I'm sincerely curious:
If you had a choice between restoring the unlimited SALT deduction or having New Jerseyans who work in New York to pay taxes to New Jersey (the state they receive services from), which would you choose? 
New Jerseyans pay, on the net, $2.5 billion more in taxes to New York than New Yorkers who work in NJ pay to New Jersey.
https://www.nj.com/opinion/index.ssf/2017/08/why_nj_commuters_subsidize_nys_economic_developmen.html

 For myself, this misses the mark of why I'm upset with the GOP tax law. To address my point, I'd rephrase the hypothetical this way:

If you had a choice between restoring unlimited SALT deductions, or keeping the new SALT cap but rolling back the tax cuts this funded and instead redirecting it toward expanding medicare access, which would you choose?

It's the use of the revenue generated from the SALT capping, rather than the SALT cap itself, that I have the biggest problem with.

drummerboy said:

 Runner_Guy said:
I'm sincerely curious:
If you had a choice between restoring the unlimited SALT deduction or having New Jerseyans who work in New York to pay taxes to New Jersey (the state they receive services from), which would you choose? 
New Jerseyans pay, on the net, $2.5 billion more in taxes to New York than New Yorkers who work in NJ pay to New Jersey.
https://www.nj.com/opinion/index.ssf/2017/08/why_nj_commuters_subsidize_nys_economic_developmen.html

 The two taxes are unrelated - why relate them?

 Because the capping of the SALT deduction is seen as something that is unfair not to individual taxpayers, but to a state as a whole.  Since the SALT deduction has been capped, governors of high-tax states have called it an "attack" on them.

IMO, the fact that people pay state income taxes to the state they work in and not the state they reside in, is also an example of the tax system being unfair to states.  In the case of NJ/NY, New Jersey loses a net of $2.6 billion, which is about 17% of New Jersey's own total income taxes.  

ml1 said:

drummerboy said:

Runner_Guy said:
I'm sincerely curious:
If you had a choice between restoring the unlimited SALT deduction or having New Jerseyans who work in New York to pay taxes to New Jersey (the state they receive services from), which would you choose? 
New Jerseyans pay, on the net, $2.5 billion more in taxes to New York than New Yorkers who work in NJ pay to New Jersey.
https://www.nj.com/opinion/index.ssf/2017/08/why_nj_commuters_subsidize_nys_economic_developmen.html

 The two taxes are unrelated - why relate them?

 This. 
But paying taxes to NY doesn't bother me. I'm in the city every day and I use an awful lot of their services. Now that we don't have kids in public school, probably as much as I use NJ services. I don't suppose I'm alone in this. 

 Really? 

But, assuming you work for a for-profit, your employer pays New York State corporate taxes.  Your employer also most likely pays NYC property taxes too.  As a consumer, you pay sales tax on numerous things you purchase.  

Non-residents who work for the City of New York still pay NYC income taxes.

I don't see a relevance to your not having kids in the public schools anymore, but that argument reminds me very strongly of an argument that private-school parents make in favor of vouchers or other rebates, which is "we don't use the public schools, since we could but don't, so we should get some of our education taxes back."  Most of the time on MOL progressives insist that non-use of a government service doesn't entitle you to any of your taxes back.

And would your opinion be different if you still had kids in the NJ public schools?

(Most of the income taxes New Jerseyans pay goes to support low-income communities and not to pay for anything in middle-class communities, but that is a separate topic)

I guess more to the point is that I work in NY so of course that's where I pay taxes. 

Runner_Guy said: Because the capping of the SALT deduction is seen as something that is unfair not to individual taxpayers, but to a state as a whole.  Since the SALT deduction has been capped, governors of high-tax states have called it an "attack" on them.

It was a change to tax law that was well known would nearly exclusively impact states whose political leadership is the opposition party of those making the change. Further, it was done with the aim of funding tax cuts for the donor base of the party writing the law. Viewing this as a politically-motivated change is not unreasonable.

Runner_Guy said:

Non-residents who work for the City of New York still pay NYC income taxes.

Two things:  first, what you write above is simply incorrect.  Non-resident employees of the City do not pay NYC income taxes.  Second, the fact that you take anything written about taxes by EJ McMahon seriously shows you're not paying attention.  This is someone who seems to believe that pretty much all taxes are wrong and will make any argument, no matter how specious, to convince people to challenge the imposition of taxes.  He trades on ignorance and selfishness.

Steve said:

Runner_Guy said:

Non-residents who work for the City of New York still pay NYC income taxes.

Two things:  first, what you write above is simply incorrect.  Non-resident employees of the City do not pay NYC income taxes.  Second, the fact that you take anything written about taxes by EJ McMahon seriously shows you're not paying attention.  This is someone who seems to believe that pretty much all taxes are wrong and will make any argument, no matter how specious, to convince people to challenge the imposition of taxes.  He trades on ignorance and selfishness.

You are wrong when you say non-residents who work for NYC don't pay NYC income taxes.

See this

However, if you’re an employee of New York City, you may be required to file returns and pay taxes directly to the city finance department.

And this:

New York City Income Tax

New York City has a separate city income tax that residents must pay in addition to the state income tax. The city income tax rates vary from year to year. The tax rate you'll pay depends on your income level and filing status and it's based on your New York State taxable income. There are no city-specific deductions, but some tax credits specifically offset New York City income tax.

If you work for the city but live elsewhere, you must still pay an amount equal to the tax you would have owed if you lived there if you began employment after January 4, 1973.

As for Ed McMahon, name a single thing in McMahon's piece that is factually wrong, out of context, or misrepresented.  He is saying that since NJ commuters pay a huge amount in New York State taxes, that New York State should take more seriously their public transit needs.  

He also describes, factually, how large NYS tax revenue is from New Jerseyans compared to other regions of New York.

Just because someone has a frank ideological commitment doesn't mean that everything he or she says is wrong about that subject.  The New Jersey Policy Perspective has many ideological dogmas that taxes = "investment" and that state tax codes should be weapons against inequality, but I still take their stuff seriously until I feel that they are factually wrong or way out of context.  

Again, show me the provision of law that imposes NYC income taxes on non-resident employees.   Pro-tip: it doesn't exist.  I know more about this than you ever will.

Also, McMahon's intent is to foment discord over taxes and divide the people in an effort to garner support for the elimination of taxes.  If he truly cared about infrastructure, he'd argue for fair and equitable taxation.  He doesn't.

Steve said:
Again, show me the provision of law that imposes NYC income taxes on non-resident employees.   Pro-tip: it doesn't exist.  I know more about this than you ever will.

This seems relevant. Can you put the WHO MUST FILE section into terms that an interested third party like myself might understand?

https://www1.nyc.gov/assets/finance/downloads/pdf/18pdf/business_tax_forms/nyc-1127_2018.pdf

Can we take the revenue raised by capping NY and NJ's SALT and build new trans-Hudson tunnels and fully fund the NY and NJ trains? I'd be fine with the SALT cap in that case.

DaveSchmidt said:

Steve said:
Again, show me the provision of law that imposes NYC income taxes on non-resident employees.   Pro-tip: it doesn't exist.  I know more about this than you ever will.

This seems relevant. Can you put the WHO MUST FILE section into terms that an interested third party like myself might understand?
https://www1.nyc.gov/assets/finance/downloads/pdf/18pdf/business_tax_forms/nyc-1127_2018.pdf

Most basically, Section 1127 of the City Charter does not impose a tax.  Matter of Legum v Goldin, (55 NY2d 104 [1982].  It's a contractual agreement that the City allows its employees to enter into in exchange for not imposing a residency requirement.

Steve said:

Most basically, Section 1127 of the City Charter does not impose a tax.  Matter of Legum v Goldin, (55 NY2d 104 [1982].  It's a contractual agreement that the City allows its employees to enter into in exchange for not imposing a residency requirement.

Thanks. 

Runner_Guy said:

You are wrong when you say non-residents who work for NYC don't pay NYC income taxes.

Whether you decide Steve’s reply to me is beside the point or not, I think you were better off when you originally phrased that as a question.

you're welcome.

PVW said:
Can we take the revenue raised by capping NY and NJ's SALT and build new trans-Hudson tunnels and fully fund the NY and NJ trains? I'd be fine with the SALT cap in that case.

 I realize your question was probably rhetorical, but with this administration and Senate the answer is a solid no.  

NJ (and other out of state) commuters DID pay NYC local income tax in the past, but that was changed quite some time ago.  I don't know if there is some special distinction for those who are employees of the city itself, but my spouse works for a private employer in NYC (and I do our tax returns), so I can absolutely attest to the fact that we used to pay NYC income tax but no londer do.  Of course we DO still pay NY State income tax.

Whatever the situation is for non-NYC residents who work for the City, most commuters work for for-profits and their employers pay significant taxes and individual commuters pay sales taxes, so NYC + NYS are still well-compensated for the services they provide for commuters.

When I posed my question about NYS's seizure of New Jerseyans' income taxes, I assumed that people would agree that it was unfair, but that it was the status quo and could not be changed, and therefore we should focus on capping the SALT deduction.

I'm shocked that so many people have defended NYS's taking of New Jersey income taxes and even claimed that they take more services from NYS than they do from New Jersey.  

Since your income is your money and anyone who is middle-class or above pays income taxes anyway, it's shocking to me that some would be so ok with their "state" income taxes being spent on who-knows-what/who-knows-where in New York and not themselves personally, their own New Jersey community, or low-income communities within their own state.

Runner_Guy said:

I'm shocked that so many people have defended NYS's taking of New Jersey income taxes and even claimed that they take more services from NYS than they do from New Jersey.  
Since your income is your money and anyone who is middle-class or above pays income taxes anyway, it's shocking to me that some would be so ok with their "state" income taxes being spent on who-knows-what/who-knows-where in New York and not themselves personally, their own New Jersey community, or low-income communities within their own state.

“So many people have defended”?

If I were easily shocked, I’d probably be shocked that you gleaned that from the three posters who directly responded to your question. Not to mention mildly stupefied, perhaps, that a perspective other than your own would shock you.

DaveSchmidt said:

Runner_Guy said:

I'm shocked that so many people have defended NYS's taking of New Jersey income taxes and even claimed that they take more services from NYS than they do from New Jersey.  
Since your income is your money and anyone who is middle-class or above pays income taxes anyway, it's shocking to me that some would be so ok with their "state" income taxes being spent on who-knows-what/who-knows-where in New York and not themselves personally, their own New Jersey community, or low-income communities within their own state.

“So many people have defended”?
If I were easily shocked, I’d probably be shocked that you gleaned that from the three posters who directly responded to your question. Not to mention mildly stupefied, perhaps, that a perspective other than your own would shock you.

 Yeah, I did find it shocking that at least one person employed libertarian/conservative arguments in favor of New York State's taxation of New Jerseyans.

ml1 said:
I guess more to the point is that I work in NY so of course that's where I pay taxes. 

 and

ml1 said:
But paying taxes to NY doesn't bother me. I'm in the city every day and I use an awful lot of their services. Now that we don't have kids in public school, probably as much as I use NJ services. I don't suppose I'm alone in this. 

Since when does it matter to progressives if someone uses or doesn't use a government service?  On the contrary, a progressive tax code imposes the highest taxes on people who use the least government services and the lowest taxes on people who use the most government services.  

If non-use of a government service entitles someone to somehow not owe taxes, then should non-parents get some discount, since their non-existent kids will never attend a public school or public higher ed?  

Also, I assume that ml1 is aware that no middle-class or affluent person in New Jersey who pays income taxes directly benefits very much from those taxes.  New Jersey's income taxes are overwhelmingly used to benefit low-income communities and then teacher pensions and post-retirement healthcare (which are for teachers of all districts, including SOMA)  

So "I don't use New Jersey services, therefore it's ok that I don't pay NJ income taxes" seems pretty unconvincing to me.

sac said:
NJ (and other out of state) commuters DID pay NYC local income tax in the past, but that was changed quite some time ago.  I don't know if there is some special distinction for those who are employees of the city itself, but my spouse works for a private employer in NYC (and I do our tax returns), so I can absolutely attest to the fact that we used to pay NYC income tax but no londer do.  Of course we DO still pay NY State income tax.

 The "Commuter Tax" was eliminated in the late 90s.  It was about a .45% rate.  

Runner_Guy said:

So "I don't use New Jersey services, therefore it's ok that I don't pay NJ income taxes" seems pretty unconvincing to me.

Except the position was “I use New York services, therefore it’s ok that I pay NY income taxes.”

See the difference? 

Shock just gets in the way.

Runner_Guy said:
...
Also, I assume that ml1 is aware that no middle-class or affluent person in New Jersey who pays income taxes directly benefits very much from those taxes.  New Jersey's income taxes are overwhelmingly used to benefit low-income communities and then teacher pensions and post-retirement healthcare (which are for teachers of all districts, including SOMA)  
So "I don't use New Jersey services, therefore it's ok that I don't pay NJ income taxes" seems pretty unconvincing to me.

Most people don't "directly" benefit from any government expenditures. The role of  taxation in maintaining a stable, working, prosperous, civil society is a bit more complicated than receiving a personal check/benefit from the government.

drummerboy said:

Runner_Guy said:
...
Also, I assume that ml1 is aware that no middle-class or affluent person in New Jersey who pays income taxes directly benefits very much from those taxes.  New Jersey's income taxes are overwhelmingly used to benefit low-income communities and then teacher pensions and post-retirement healthcare (which are for teachers of all districts, including SOMA)  
So "I don't use New Jersey services, therefore it's ok that I don't pay NJ income taxes" seems pretty unconvincing to me.

Most people don't "directly" benefit from any government expenditures. The role of  taxation in maintaining a stable, working, prosperous, civil society is a bit more complicated than receiving a personal check/benefit from the government.

Right, but we're talking about the fact that New Jerseyans who work in New York pay income taxes to New York, not New Jersey.  

So, ml1 and other commuters are doing their part to build a stable, working, prosperous, civil society in New York, and not the state they actually live in and which has the same needs for stability, functionality, prosperity etc. 

I agree with you: paying state income taxes isn't something you do in exchange for government services.  It's something you do for your state's social benefit, and thus, I don't think it makes sense that someone should pay for another state's social benefit.

Also, although most NJ income taxes are used to benefit low-income communities, there is _some_ spent on middle-class communities, chiefly in the form of the state's payments for TPAF, teachers' Social Security, and teachers' Post-Retirement Healthcare, and then in some direct-tax rebates and forms of county aid.

For FY2019 TPAF received $1.2 billion in income taxes, teachers' Social Security received $775 million, post-retirement healthcare received $1.25 billion.  (I am unsure of the amount of direct tax rebates).  

This might be getting more off-topic, but ml1's statement that he feels he doesn't use NJ public services anymore because his kids are out of school isn't really budgetarily accurate, since there's a lot of post-retirement school employee compensation that is owed to ml1's children's teachers.

Runner_Guy said:

DaveSchmidt said:

Runner_Guy said:

I'm shocked that so many people have defended NYS's taking of New Jersey income taxes and even claimed that they take more services from NYS than they do from New Jersey.  
Since your income is your money and anyone who is middle-class or above pays income taxes anyway, it's shocking to me that some would be so ok with their "state" income taxes being spent on who-knows-what/who-knows-where in New York and not themselves personally, their own New Jersey community, or low-income communities within their own state.

“So many people have defended”?
If I were easily shocked, I’d probably be shocked that you gleaned that from the three posters who directly responded to your question. Not to mention mildly stupefied, perhaps, that a perspective other than your own would shock you.

 Yeah, I did find it shocking that at least one person employed libertarian/conservative arguments in favor of New York State's taxation of New Jerseyans.

ml1 said:
I guess more to the point is that I work in NY so of course that's where I pay taxes. 

 and

ml1 said:
But paying taxes to NY doesn't bother me. I'm in the city every day and I use an awful lot of their services. Now that we don't have kids in public school, probably as much as I use NJ services. I don't suppose I'm alone in this. 

Since when does it matter to progressives if someone uses or doesn't use a government service?  On the contrary, a progressive tax code imposes the highest taxes on people who use the least government services and the lowest taxes on people who use the most government services.  
If non-use of a government service entitles someone to somehow not owe taxes, then should non-parents get some discount, since their non-existent kids will never attend a public school or public higher ed?  
Also, I assume that ml1 is aware that no middle-class or affluent person in New Jersey who pays income taxes directly benefits very much from those taxes.  New Jersey's income taxes are overwhelmingly used to benefit low-income communities and then teacher pensions and post-retirement healthcare (which are for teachers of all districts, including SOMA)  
So "I don't use New Jersey services, therefore it's ok that I don't pay NJ income taxes" seems pretty unconvincing to me.

It really doesn't matter to me.  I thought it might matter to you.  Because I fundamentally don't get your objection to people paying taxes to the state where they work.

I spend more than half my waking life in NYC.  I make my living there.  I pay taxes there.  It makes sense to me, and it doesn't seem "unfair."  And I do pay taxes to NJ, Essex County and Maplewood.  So I don't seen any inherent unfairness in any of it.

Certainly not like the 2017 tax bill which was truly and specifically designed to raise taxes on people living in specific states that tend to support one political party.

drummerboy said:

Runner_Guy said:
...
Also, I assume that ml1 is aware that no middle-class or affluent person in New Jersey who pays income taxes directly benefits very much from those taxes.  New Jersey's income taxes are overwhelmingly used to benefit low-income communities and then teacher pensions and post-retirement healthcare (which are for teachers of all districts, including SOMA)  
So "I don't use New Jersey services, therefore it's ok that I don't pay NJ income taxes" seems pretty unconvincing to me.

Most people don't "directly" benefit from any government expenditures. The role of  taxation in maintaining a stable, working, prosperous, civil society is a bit more complicated than receiving a personal check/benefit from the government.

 yes.  That's why I'll admit that what I posted above about what services I "use" in NJ was stupid.  Very stupid.  And now I'd like to retract it.

I don't want to take things any deeper about states taxing non-residents' income, so I have another question for you all:

Another component of the TCJA that disproportionately affects New Jersey is the capping of the mortgage deduction at $750,000 for new purchases.

Of this I've heard very little criticism from SOMA people or NJ elected officials.  

Is this a tax code change you accept even though it should negatively affect New Jersey, SOMA, and perhaps you personally?  

Runner_Guy said:
I don't want to take things any deeper about states taxing non-residents' income, so I have another question for you all:



Another component of the TCJA that disproportionately affects New Jersey is the capping of the mortgage deduction at $750,000 for new purchases.
Of this I've heard very little criticism from SOMA people or NJ elected officials.  
Is this a tax code change you accept even though it should negatively affect New Jersey, SOMA, and perhaps you personally?  

 do you really not see any difference between the two?

Runner_Guy said:
I don't want to take things any deeper about states taxing non-residents' income, so I have another question for you all:

 I don't know, I think it's actually an interesting question, as it gets into why people think taxation is justified (or not).

I actually think it's perfectly justified to tax people based on where they earned their money rather than where they reside. The idea here being that, to my mind, what justifies taxes is that organized work of the community you are laboring in (eg "government" plays a large part in making it possible for you to create wealth in the first place. Therefore, it makes sense that this community has some claim on my resultant wealth. (how much? A harder question, but not zero -- taxation is not theft in this view, though excessive taxation arguably is).

Thus it's perfectly fair, to my mind, that non-citizens of a state (or country) pay taxes. It's even fair that undocumented immigrants pay taxes. Any money they earned, they earned at least in part because of the labors of the community they are working in.

That justifies having a citizen of NJ who works in NY pay NY taxes. Why should they pay NJ taxes? Arguably, because of a similar justification -- they are part of their home state community, so that community also has a legitimate claim to their wealth, having made the creation of that wealth possible. Again, how much of a claim is an open question, but certainly a claim.

I think though that NJ has a claim to less of that wealth than NY does. Also, both NJ and NY are smaller parts of the national community -- though I suppose they could look to their narrow individual interests and both try to extract as much tax from commuters as possible, that would be counter to the broader goods of the shared NY-NJ (and national community) -- NJ may be missing out on some taxes by not trying to collect what NY already has, but that would discourage a lot of people from living in NJ, to the detriment of the NYC metro as a whole.

PVW said:

Runner_Guy said:
I don't want to take things any deeper about states taxing non-residents' income, so I have another question for you all:

 I don't know, I think it's actually an interesting question, as it gets into why people think taxation is justified (or not).
I actually think it's perfectly justified to tax people based on where they earned their money rather than where they reside. The idea here being that, to my mind, what justifies taxes is that organized work of the community you are laboring in (eg "government" plays a large part in making it possible for you to create wealth in the first place. Therefore, it makes sense that this community has some claim on my resultant wealth. (how much? A harder question, but not zero -- taxation is not theft in this view, though excessive taxation arguably is).
Thus it's perfectly fair, to my mind, that non-citizens of a state (or country) pay taxes. It's even fair that undocumented immigrants pay taxes. Any money they earned, they earned at least in part because of the labors of the community they are working in.
That justifies having a citizen of NJ who works in NY pay NY taxes. Why should they pay NJ taxes? Arguably, because of a similar justification -- they are part of their home state community, so that community also has a legitimate claim to their wealth, having made the creation of that wealth possible. Again, how much of a claim is an open question, but certainly a claim.
I think though that NJ has a claim to less of that wealth than NY does. Also, both NJ and NY are smaller parts of the national community -- though I suppose they could look to their narrow individual interests and both try to extract as much tax from commuters as possible, that would be counter to the broader goods of the shared NY-NJ (and national community) -- NJ may be missing out on some taxes by not trying to collect what NY already has, but that would discourage a lot of people from living in NJ, to the detriment of the NYC metro as a whole.

 I see your point when you say "The idea here being that, to my mind, what justifies taxes is that organized work of the community you are laboring in (eg "government" plays a large part in making it possible for you to create wealth in the first place. Therefore, it makes sense that this community has some claim on my resultant wealth" but this begs the question of what the justification is for a state to tax someone's non-wage income.

Let's say that you get $5,000 a year in dividends from a variety of companies that operate across the USA and globally.  What involvement does the State of New Jersey have in your receiving of that money?  

I would argue nothing.  

And yet the State of New Jersey taxes your dividends, plus other non-wage income like capital gains, money you inherit from out-of-staters, pensions from out-of-state employers, among others.

The moral basis for New Jersey taxing your non-wage income, even though New Jersey has nothing to do with the creation of that income, is that you as a resident of this state have an obligation to carry a proportionate share of New Jersey's socioeconomic problems, plus a small but non-trivial share of your income taxes will directly benefit your community and neighbors anyway.  

Since I see the justification for state income taxes being that we have obligations to low-income communities in our own state, in my mind, someone should pay income taxes on wage income to the state he or she lives in, even if the source is an employer in another state.  

But let's say that we agreed on your premise that where someone is laboring in that is critical.

If that is the case, when what is the justification for New York State to tax commuters based on their household's gross income?

New York further squeezes nonresident taxpayers by putting them in the bracket that corresponds to their gross incomes--including wages, capital gains, interest, and dividends earned (and taxable) solely in their home states. Thus, for example, a New Jersey married couple filing a joint return and reporting salaries of $75,000 from one spouse's job in Manhattan and $75,000 from the other's job in Jersey City will be subject to the same (higher) New York state rate as someone earning $150,000 entirely within the borders of New York.

Let's say your spouse works in NJ and you work in New York.  

Your spouse's income is derived from NJ, but that income increases your own New York State tax bracket?  

Let's say your spouse is a good investor and realizes $50,000 in capital gains, which is non-wage income made by someone who might rarely set foot in New York.  

If state income taxes are justified by where someone works, by what justification does New York put your income in a higher bracket?  

Runner_Guy said:

PVW said:
I don't know, I think it's actually an interesting question, as it gets into why people think taxation is justified (or not). ...

 I see your point when you say "The idea here being that, to my mind, what justifies taxes is that organized work of the community you are laboring in (eg "government" plays a large part in making it possible for you to create wealth in the first place. Therefore, it makes sense that this community has some claim on my resultant wealth" but this begs the question of what the justification is for a state to tax someone's non-wage income.

So it’s less shock now, and more about parsing (feasible?) details of which income dollar should be taxed in which state.

DaveSchmidt said:

Runner_Guy said:

PVW said:
I don't know, I think it's actually an interesting question, as it gets into why people think taxation is justified (or not). ...

 I see your point when you say "The idea here being that, to my mind, what justifies taxes is that organized work of the community you are laboring in (eg "government" plays a large part in making it possible for you to create wealth in the first place. Therefore, it makes sense that this community has some claim on my resultant wealth" but this begs the question of what the justification is for a state to tax someone's non-wage income.

So it’s less shock now, and more about parsing (feasible?) details of which income dollar should be taxed in which state.

I overreacted when I said I was "shocked" by a certain MOL argument, but even ml1 admitted that his justification of state income taxes based on use/non-use was something he regretted.