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Tax expert, Dave Selig, on what factors play a role in a state’s high or low tax burden on residents
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Of the places in states where it's best for businesses essentially so.
What it's what are the top states with with the -- expert right now they're right.
Sure new York New Jersey Connecticut new California.
I think Wisconsin -- and how Wisconsin I was expecting that well you have a lot of business going on Wisconsin and then you have a lot of social issues is well.
Democrat gusts up and -- while we're here -- map lets you the states with the lowest tax burden Lebanese where we're surprised you have the F Alaska on -- South Dakota oil -- there right -- -- in North Dakota Tennessee Louisiana and Wyoming.
-- just staying out of it and there's states during the last taxis and Americans paid nearly 10% of their income on state and local taxes.
Well New York considerably more.
Closing in on 13%.
That -- not account for small businesses.
Particularly.
Well the ones that half -- collect and pay over sell stocks or.
Frequently hoarded it in new York state department of taxation and finance is extraordinarily.
Aggressive as is the franchise tax board in California.
I also a lot of times a small business will be doing their best.
Trying to move along and -- final their returns.
And the state will set them aside and make their own extrapolation -- what they think it should -- Frequently these small business owners they are just absolutely befuddled as to what to do when they're presented with very large liability is.
Well sometimes the figures are really cut from whole cloth.
They included every transaction taxable and otherwise and it is a absolute challenge.
OK.
All right but.
What I what other factors playing to it.
William a couple of things in New York in New Jersey and -- you.
An awful lot of social programs that are funded directly.
By tax dollars.
Well you have a lot of -- city state municipal employees.
And -- also involved.
In a lot of the states where you see the highest tax burden.
That's also where you have the most adversarial relationship.
Between the various tax departments.
-- the business owners and to a lesser extends the individual taxpayer.
So it is a really has expanded as an industry.
His businesses can consider where they're gonna set up -- -- attacks -- you know large businesses -- relocated.
And -- itself and I think I think the largely.
In new York and many of these states are considered destinations states I.
Acts of people come there because this great opportunity.
Yeah -- you take the rough with the smooth.
Got you okay thumb.
Where OK so let's go back to the -- for the residents pay the least so taxes -- up the map of that.
On the Tax Foundation economists explain and many states have lower tax -- because they have smaller government that -- in the equation.
Absolutely particularly in -- state like Texas for instance where they can running an up and there where they run their government very efficiently.
It really is a paradigm that I would urge our elected officials collect that's tell me -- -- -- -- -- -- do more with less.
They have less employees on the payroll and and the ones who they do you have performing their various functions are performing them well.
So I know I can become pure play -- many cases when we represent somebody other from New -- -- even from another state.
-- we're challenging a tax liability and sometimes weeks will go by before I get a return call.
There's that sort of inefficiency that gets a lot of people very frustrated.
Not to mention.
During that time interest and penalties continue to accrue and I think.
That -- organization with more people would be running more efficiently but that just does not the case at least in my opinion.
OK and what other factors.
Play a role here.
Large oil infrastructure.
This doesn't think.
Well that's certainly something to consider something we do not have a new York New Jersey.
I understand that Montana as well right now -- of big boom.
As far as oil and exploration.
And -- is drawing people like a magnet so I.
Eminent companies states say that they can not Montana but the Dakotas that they can't find qualified workers.
-- -- there well I don't know if that's -- That some doing some stories on it it's interesting hills California for a little in common.
There -- obviously in a fiscal crisis many -- -- cities have.
Content declared bankruptcy.
Friday so are they gonna raise tax.
I would imagine so that seems to be you know the fall -- position.
I have been.
-- real advocate of responsible spending fiscal the fiscal accountability.
And a return to generally accepting it accepted accounting principles something that has been completely departed from state of California New York.
Any if these large states that -- awful lot of different problems that you may not happen other locations.
-- social programs illegal aliens which is very expensive.
We try to gloss over that by saying these are people who are contributing to our economy but the reality is if a person is taking now.
More than they are paying in -- really not contributing anything.
And into our tax coffers and that's frequently the case with many of those individuals largely because of some.
Well intended credits for instance section 152 of the internal revenue code.
It allows illegal aliens to deduct dependents.
Who actually live in Mexico.
-- out I swear to you and each dependent.
Is worth 3650.
Dollars it lowers -- AG either -- -- gross income and allows them to claim.
The earned income credit.
So in many of these cases you see individuals getting back.
Federal refunds in excess of 121000 dollars.
As well as matching state refunds a little bit less and they if paid in precious little particularly by comparison.
And you can see that in any area where you have a very large population of illegal aliens you'll notice so proliferation of tax return preparing agencies.
And that's because it does become a cottage industry.
-- I economy -- -- -- -- so illegal immigrants pay taxes.
If an illegal alien comes here goes on the books he can get there or she can get a taxpayer identification number.
Instead of a Social Security number.
They can go on the books for let's say 12 or three days claim at the end of the year they made 171000.
Dollars.
Deduct five dependence of Mexico where they're sending money where they are sending money he is dependents may not even be real.
And we don't check them the same way we would do for a married individual or divorced individuals year.
We've putting money into the US economy okay -- -- that maintaining consumer and the thought behind that is because in -- past real Mexico they may not have.
Formal record keeping they may record -- birth in a church resigned yeah we give them pass.
Now what's the two contiguous states cal for -- -- -- Canada and Mexico.
We don't have a problem.
With the kind of -- with fraudulent deductions.
But before all the additional credits and I would challenge any.
Sitting congressmen or senator to refute my figures.
We are defrauded in excess of 28 billion dollars a year because of this section 152.
-- spot before it out there that's -- -- I thought that I don't they like gets OK I absolutely don't like it again I would urge our elected officials to be good stewards of our money.
What do you think it would best degree as a solution.
Says it's his best balance the nation's checkbook -- -- CDC.
-- rates sign up for the wealthy.
And let's say January or -- leaving there and kick the can now -- along.
OK I would like to say first of -- of -- the entire argument that the wealthy aren't paying their fair share is.
Fallacious it is untrue.
And it's been a popular -- that everyone has grabbed -- hold of okay the fact of the matter is wealthy people pay an awful lot more taxes then.
Average honors -- patents to skew the numbers by saying percentage wise is just thought of foolish accounting track.
So I hope as I said return to generally accepted accounting principles some common sense and tighten up that's spigot on the wasteful spending however well intended -- so -- it's.
He's the only tax increase that I would support would be a federal and state tax stamp on any legal filing.
I think they'll be a great way to raise revenue we're very litigious -- a lot of people bringing these frivolous actions let them have skin in the game.
By a hundred dollar federal stamp -- hundred dollar states them men and put that into our coffers.
Think that would be a great way to raise money.
Good point he's have someone here in congress and state -- thank you so much for joining us for showing your website.
On the screen right now and the -- you everybody for joining us this week it was certainly a rough one now as happy and I am that if.
