Module 13

 

Rd and reflect on Ch. 12

Do some research online and find 4 different state or local taxes that are levied on taxpayers who live in your neighborhood. They should be 4 different kinds of taxes, such as sales tax, tobacco tax, hotel tax, and property tax.

I live in Redwood City California: the California sales tax is 9.75%, property tax rate is 1.112% (of course this an estimate and it various by property within cities and counties), tobacco tax is 59.27%, and hotel tax is 12% in Redwood city (14% in California overall).

Summarize the tax rates a person who lives in your neighborhood is subject to paying with regard to each of the 4 kinds of taxes, and how these compare to the rates paid by a person who lives in a nearby city. For example, a tax in my city of East Palo Alto is 9.75%. The Sales tax rate in adjacent Palo Alto is 9.0%

Menlo Park has the same sales tax as Redwood City (9.75%), property tax rate is the same (1.112%), tobacco tax is the same, hotel tax is 10%.

Are there ways an individual can avoid paying these taxes? From what I have read no everyone has to pay it, but there are ways that you can minimize taxes by doing it legally. I don’t know much about it, so, I can’t fully explain it. But there are some people who use the tax system to their advantage.

Does everyone pay the taxes equally?

 Yes. A flat tax burdens everyone to pay an identical amount regardless of income or economic transaction. Low-income person/families would have a harder time paying this than someone with a high-income, as it would be a difficult financial burden for the low-income family, forcing them to make financial decisions that would negatively impact their lives. Just so they can pay the taxes making them poorer in the process compared to someone who makes a high-income. 

Are they regressive or progressive? Why might local tax rates vary within a county?

That is a hard question to answer, as it various by one’s income level. Then that person could think of these local taxes as regressive or progressive. Like the point I made earlier, that everyone has to pay taxes equally, but it effects people with different incomes differently. The low-income individual or family are more likely to use public services, so, these taxes to them are progressive, while someone with high-income who doesn’t use public services might find them regressive and a waste of their own money.

Some counties have greater municipal responsibilities, different populations pose different needs for services, some counties serve many nonresidents, or counties have different local revenue raising capacity.