Arkansas Times: Appointment in Samarra
media mentionNews that at least one Huckabee has moved to Florida arrived as we were pondering, more or less, a study showing that residents of states without state income taxes, such as Florida, pay more in federal income taxes than do residents of states that have an income tax, such as Arkansas. The Huckabee(s) may not be getting as good a deal as she/they think.
The Institute on Taxation and Economic Policy examined the effect of the federal income tax deduction that taxpayers can take for the state and local taxes they pay. “Substituting an income tax for a sales tax would keep the total revenue raised by the states the same, but would substantially reduce the federal tax bills of the residents of these states,” ITEP says. Federal taxpayers can deduct state sales tax payments as well as income tax payments, but ITEP says the sales tax deduction “offers a small benefit and the lowand middle-income people for whom sales taxes are most burdensome generally do not itemize their federal tax returns, while the income tax deduction offers a much larger tax benefit and the beneficiaries – mostly upper-income taxpayers – are very likely to itemize.”
We say those who’d leave Arkansas for Florida deserve to be hoist by their own petard.