Washington State sales, excise and gross receipts tax

The Tax Foundation reports that Washington State has the highest proportion of its state and local tax revenues generated from sales, excise and gross receipts tax. Washington State generates 60.5% of its state and local tax revenues from sales, excise and gross receipts tax. The Tax Foundation's tax map with all other states is included below and can also be found here.

The balance of Washington State's state and local tax revenue comes from property taxes (31.5%) and other taxes (8.0%). Washington State has no individual income tax or corporate income tax per the Tax Foundation's report on The Sources of State and Local Tax Revenues.

Tax Calculator (Post Fiscal Cliff)

The good folks at the Tax Foundation have put together a comparative tax calculator to show what you would have if the country had gone "over the cliff."

This great tool can be found here.

Fiscal Cliff: Your Payroll Taxes are going up! (Yes, You)

In 2013, your payroll taxes are going up! One tax provision that was not addressed in the "fiscal cliff deal" was the expiration of the "payroll tax holiday." Under that temporary cut, employee's share of the payroll tax that funds social security was reduced to 4.2% from 6.2%. This cut was not continued.

Therefore, every American wage earning family will find their next paycheck lower. The Wall Street Journal calculates that this will result in additional payroll taxes of $1,000.00 per year for a U.S. family earning $50,000.00 a year.

For additional information on the payroll tax:

Payroll taxes, going up!

Payroll Tax & Social Security: troubling numbers...

2010 Federal Revenue Sources: a surprising amount came from payroll taxes.

Fiscal Cliff Deal: What it means for 2013 taxes!

As you probably already know, the House and Senate have passed a fiscal cliff deal which the President has said that he would sign.

Although in depth analysis is premature (the text of the Senate bill is 157 pages), some key figures are already known. This from the good folks at the Tax Foundation, much more in depth analysis can be found there. Check it out!

Particulars of the Deal from the Tax Foundation:

Income Tax Brackets:

"Retains the 10 percent, 15 percent, 25 percent, and 28 percent income tax brackets from the Bush tax cuts permanently

Retains the 33 percent and 35 percent income tax brackets from the Bush tax cuts for taxable income under $400,000 (single), $425,000 (head of household), and $450,000 (joint filers). Imposes 39.6 percent tax rate on income above this level."

Capital Gains & Dividend Tax:

"Capital gains tax and dividends tax will be 20 percent for taxpayers with income over $400,000 (single) and $450,000 (joint filers). This does not include the new 3.8 percent health care tax on investment income above $200,000 (single) and $250,000 (joint filers) in adjusted gross income, so the top rate for capital gains and dividends will be 23.8 percent. For lower income levels, the tax will be 0 percent, 15 percent, or 18.8 percent."

Estate & Gift Tax

"Raises estate and gift tax to 40 percent, but above the current exemption level (~$5.12 million) and adjusted for inflation in future years"

Alternative Minimum Tax

"Permanently sets Alternative Minimum Tax (AMT) exemption at $50,600 (single) and $78,750 (joint filers) for 2012 and adjusts for inflation thereafter"

Obama & Romney Tax Plans

Now that the election is only days away, it is helpful to look once again at the Obama and Romney Tax Plans. I get this information from the Tax Policy Center (TPC) who has done excellent work on this.

Click here to find TPC's more in depth analysis for Obama and Romney.

Obama's plan in a nutshell (Quote From TPC):

The elevator speech: Obama would retain the current individual income tax system, but raise taxes on high-income households to help reduce the budget deficit. He'd lower corporate tax rates but make it harder for multinationals to avoid U.S. tax on their foreign income.

Romney's plan in a nutshell (Quote From TPC):

The elevator speech: Romney favors multiple tax cuts for individuals and would reduce corporate income tax rates. By themselves, his specified tax cuts would reduce federal revenues by trillions of dollars over the next decade. However, Romney says he would avoid adding to the deficit through faster economic growth and unspecified reductions in current tax preferences. Romney would not use new taxes to help lower the deficit.

Capital Gains and Dividends: One important distinction between Obama and Romney's plans is that Obama proposes an increase of the dividend rate to 39.6% (up from the current 15% rate) and the capital gains rate increased to 20%. Romney proposes to make capital gains and dividends tax free (to households making $200,000.00 or less) and keep the current 15% rate for those making $200,000.00 or more.