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List of States With no Income Tax

Posted by Jay Louineaux on
Daily News

If you are sick and tired of looking at your tax form and crying about the federal income tax you paid, it probably adds salt to your wounds when you look at the state portion of the taxes that you pay. You’re basically getting taxed every which way.

In fact, no less of a celebrity than Whoopi Goldberg said, “When living in New York, you’re basically getting taxed going out, coming back in, going forward, going backward.” You can sense the desperation in her voice.

And she actually has a major point to make. Depending on where you live in the United States, the federal income tax is actually the least of your worries. While there has been moves under the Trump presidency to roll back federal income tax, unfortunately, that’s not the only tax you pay.

If you live in a high tax jurisdiction like New York city, you are in a sad state. Especially if you make a lot of money. Not only do you have to pay federal income tax, but you also have to pay state income tax and county taxes and fees and other things that are disguised as non taxes but actually work as taxes.

At the end of the day, the typical high income New York city resident basically has to pay over 50% of their income. If this sounds like something that happens in Scandinavia and Sweden, you have another thing coming because if you are a middle income person, the argument could be made that life is actually better in those countries than in the United States as far as your tax responsibilities go.

Given the fact that there are an increasing number of jurisdictions like New York city, more and more people are looking for a list of states with no income tax. Can you imagine that? This list of states with no income tax involves states that have completely waived their right to impose an income tax on your earnings.

Depending on your income, this can translate to tens of thousands if not hundreds of thousands of extra dollars every single year. It is all not a surprise that a lot of the states in the list of states with no income tax tend to have more robust economies compared to high tax states.

In fact if you look at the exodus of people leaving certain states, New Jersey and New York always top the list. It doesn’t take a rocket scientist or a brain surgeon to figure out why these people are leaving. Unfortunately, the people leaving are the types of residents you don’t want to leave.

These are people who own businesses. These are people who are highly skilled. They have advanced degrees. In other words, they have so much to offer to the rest of society. But unfortunately, the high tax regimen and policies of these jurisdictions leave them with very few options.

So if you’re one of those people or if you’re just starting out and you want to start out right in a state that has no income tax, you might want to consider this list of states with no income tax. The states are Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

Now, here’s a little bit of a caveat. It’s really easy to get excited about the fact that these states have absolutely no state income tax. But don’t let that fool you. Remember, states still have to have police. States still have to make sure that the roads are paved. States still have state responsibilities.

Now, if you’re going on an interstate highway, that’s the federal government funding that highway. But what about state roads? What about those little known roads that go from county to county? This is why these places tend to have sales taxes or other revenue generating systems.

Don’t think for a second that once you go to Alaska, Florida, Nevada, South Dakota, Wyoming, Texas or Washington that somehow, someway, you’re living a tax free fantasy land. It doesn’t work that way. You are still going to pay one way or the other.

Remember: states still have to pay for their welfare schemes, their infrastructure, as well as their state-based programs. It would be tempting to think that when it comes to the ‘big stuff,’ the federal government is paying the bill. Think again.

While the federal government does take the lion’s share of media attention when it comes to government coverage, there’s a lot going on at the state level. Unfortunately, whenever lawmakers think the state is ‘responsible’ for something (instead of people being responsible for themselves) you, the taxpayer, is on the hook. It is so predictable.

Since state legislators, like their federal counterparts, are usually quite generous and charitable with money they don’t own, states have all sorts of programs that need in-state funding. Where do you think tax-free states get the funding for these?

First, look at property taxes. Many states that don’t have income tax get the tax revenues they need for state programs from taxing the value of your home. If you have a home that’s worth a million dollars, don’t be surprised if you have to pony up as much as $30,000 in state property tax year after year.

Next, if you’re lucky enough to live in a state that doesn’t jack its residents up with ridiculous property taxes, you may not yet be off the hook because your state may charge outrageous sales taxes on in-state commerce.

But in the big scheme of things, you don’t have to worry about state income tax. However, certain states have charged such high property taxes that it kinda evens out. So do yourself a big favor. Research the total tax burden you are going to assume before rushing into any of these states with no income tax.

You might be in for a shock. In fact, the numbers may be so big that it would probably be a better idea to stay put where you are.

Why the American Justice System Favors the Rich

Posted by Jay Louineaux on
Daily News

There’s a long running American idea regarding the justice system. The idea is that we are all equal under the law and there is justice for all. Those words sound really good. They have a nice ring to them. But the problem is we live in reality.

As you probably already know, there is such a thing as inequality. And it’s not always evil. In fact, inequality is natural. I know a lot of people are going to be upset at that. A lot of people are going to be up in arms about that idea. They can’t accept it. They can’t even think about it. A lot of people can’t even wrap their mind around the possibility that injustice and inequality is really the state of the human condition.

But hear me out. Have you heard of the 80 20 rule or the pareto principle? If you haven’t, it’s no big deal because it’s all around you. If you look at the typical NBA team and pay attention to the points scored by that team, I can guarantee you that only 20% or even less of the people on that NBA teams roster account for 80% or more of the points earned by that team.

This is not an accident. This plays out in any kind of human endeavor. Whether we’re talking about making money, getting more dates from pretty women or handsome guys, losing weight, getting good grades, you name it!

As long as it involves some sort of societal reward, there will always be this disparity. In fact, in the third world or even in the United States, 20% of the population own 80% of the wealth. 20% of professionals own 80% of income in their profession. So on and so forth.

You have to have this context in mind when looking at the inherent fairness of the American justice system. If a rich person can not hire the very best attorney, and I’m not talking about theory here. I’m talking about people like Michael Jackson during his criminal trial as well as OJ Simpson during the time when he was accused of murdering his wife.

What do these people have in common? Well, they’re both famous and they’re rich. And what happened? That’s right! Both of them got off the hook. Both of them acquitted. Is this an insult to the concept of justice for all? Does this delegitimize our conceptions of the American justice system?

No! It doesn’t! All it shows is that if you are rich, you have the resources to buy the very best legal services so you can get the outcome you’re looking for. How’s this any different from a person going to a plastic surgeon, paying really good money so he or she can get the very best professional possible and getting good results?

On the other hand, somebody with a limited budget goes to somebody with less experience or somebody who has been sued for malpractice and basically rolls the dice and hopes for the very best. I know it sounds unjust and in a perfect world, everything would be equally distributed in terms of outcome.

But we don’t live in a perfect world. It’s a good idea when it comes to asking ourselves why the American justice system favors the right to focus more on how reality actually is instead of what we wish it to be.

The truth is, the American justice system favors the rich the same way as the economic system favors the rich or the academic system favors the rich. Talking about the academic system, let me tell you, even Harvard University, which issues probably the very best diploma you could ever get on planet earth, will let you in if your parents or you yourself donated north of a hundred million to the school.

How’s that for the rich being favored by the system? The justification for that is that your gift qualifies you for admission because you are essentially donating to a worthy cause. That hundred million dollars that you donated to Harvard University can fund so many professors. It can fund so many researches that can possibly touch and improve the lives of millions of people all over the world.

Do you see how this works? So it’s not really a question whether the rich get the very best things in life. Believe me. That’s always been the case. Those hieroglyphics in Egypt and the carvings on Aztec ruins and Chinese temples (and many others) all tell the same story: the right get the best of life and everyone else settles for the crumbs.

Of course, hierarchy is always part of the human experience because when you look at how you view other people, you are probably sizing them up and putting them in a hierarchy. If you do it, how can you be so sure people in general shouldn’t do it? The truth is, hierarchies exist for a reason. They simply reveal the natural distribution of rewards in any human society.

The Pareto Principle or 80/20 Rule will always be in effect. There will always be people at the bottom, the middle, and of course at the top. This was the case in the past, this is the case right now, and this will continue to persist long into the future.

So if you are worried about whether the justice system favors the rich, maybe the better question to ask is “how do I scale up the net worth ladder so the system works for me instead of against me?”

Believe me, this is probably going to be more productive than just railing at injustice, unfairness, and everything else rotten with ‘the system.’ You’d be just as effective as an old man shaking his fist at the sun in the middle of a very hot summer day if you were to assume that attitude.

The issue is how can we ensure that the justice system operates optimally for the rest of the population.