American Tax System

[killerman]

Hello Everyone,

I was recently in New York and found that they had sales tax on many items that they do not over the river in New Jersey and this has got me intrigued into how the whole tax system works in the USA, therefore is there anybody that can tell me how you pay national and local taxes and are there other taxes for such things as housing and local services like the police etc.

Many Thanks

Mike

[Bev2007]

If you rent you dont pay an equivalent to council tax. The owner pays a property tax but this does not cover services as these are provided and contracted from teh private sector - effectively you hire someone to take your rubbish away.

[Bev2007]

Each state has its own rules regarding sales taxes - New York and New Jersey are different states so have different tax regimes.
Police are paid for from income tax, rates of which depend on your earnings (more you earn teh more you pay), whether you own property (if you do you pay less, but youre also paying propety tax) and how many dependants you have including spouse (a Bush effort o encourage good Christian Folk).

[Clanad]

As you've noted, each State and indeed, each political subdivision such as County (Parish in Louisiana) and city have the legal right to collect certain taxes. The Federal government imposes income tax and a myriad of other taxes, such as fuel taxes (55 cents per gallon right now) but these can increase by imposition of similar taxes by the above named sub-divisions. Here in my State in the western U.S. for example, the fuel tax is increased above the Federal tax by 18 cents per gallon. This is used to build and maintain the road system (supposedly). The State also imposes a Sales tax in the amount of 4% and each city adds another 1 to 11/2%. Some items are excluded, often times food, for example.
The State and County collects property taxes which are based on a mill levy which is a percentage of the assessed value of ones property. This pays for city and county services (fire, police). Included in this tax bill (property) is a seperate assessment for school taxes and spent as the name implies. One problem (among many) is that encountered neighboring State in that it doesn't impose a sales tax (although they do impose a State income tax) so towns in my State lose a lot of "big ticket" sales (cars, appliances) to that State since they don't have to pay the Sales tax.
Confused? So are we, since this is but a brief synopsis...

[Clanad]

Bush gets the blame for many things, as do "good Christian Folk"... however the deduction for dependant's (including spouse) began around 1913. A married couple can, if they choose, file individually...

[Trotbot]

An automation project to determine the correct application of Sales and Use taxes in the US for large cross-State retailers can run into millions of dollars. However, the savings from incorrect taxes and penalties make it worthwhile.
Time for VAT?

[Bev2007]

Dont like Bush much but have nothing against Good Christian Folk (count myself amongst them?). But thankyou Clanad I stand corrected in implying this is a recent policy change..........