Comparison: State Income Tax, Oregon vs. Florida

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Income Tax, Oregon vs Florida, Comparison and Analysis

Income tax, as defined by thefreedictionary.com, is “A charge imposed by government on the annual gains of a person, corporation, or other taxable unit derived through work, business pursuits, investments, property dealings, and other sources determined in accordance with the Internal Revenue Code or state law.” In layman's terms, Income tax is money taken out of someone's pay and given to the government, state, federal, or in some cases both. Some special exceptions apply, but in the states being covered in this essay, being Florida and Oregon, those exceptions will not bother us as of right now, although we will look at them later as a point of comparison. Today we are asking ourselves why Florida has no income tax, but Oregon does. We will look over some things such as basic tax laws, other tax laws and regulations in the state regarding similar matters. We will also mozy on over to some population and citizen facts and trends, and relate them to why the government in each state has set up taxes the way they have. In the end we will come to a conclusion on why states do what they do, and whether that is a good thing or not.

Let’s first delve into the origins of income tax and the origination in the United States. One of the first income taxes was passed in late 18th century Britain. It was a very small tax at .08% of income for those making £60 and up and it moved up to 10% for anyone lucky enough to make a living of over £200. This was the inspiration for the tax proposal during the War of 1812 to provide the government with extra income. The war ended less than a year after the tax was proposed so it was never appointed. During the Civil War, another tax was proposed and implemented, in 1961, being 3% of incomes over 800 dollars. Later, in 1894 another tax law overcame it and was made to 2% on incomes over 4,000 dollars, meaning less than one out of ten households even paid the tax.

Now let’s just say it, of course the majority of the working class dislikes income tax, or any sort of tax for that matter, especially income though, because you pick up your paycheck and right there you almost always look and see, deduction, deduction, etc. Let’s take that first part into consideration though, working class. Working class as defined by thefreedictionary.com is “The socioeconomic class consisting of people who work for wages, especially low wages, including unskilled and semiskilled laborers and their families.” This is generally referred to if you were to turn into political debates or discussions, on how things will affect the working class, and how the candidates will want to please the working class, blue collar Americans. Generally working class Americans work at basic or low level jobs, i.e. ones you wouldn’t need to take college or any paid training to do. Some examples would be Cashier, Warehouse worker, Criminal Henchman... okay maybe not that last one. Anyways, if you happen to be one of these people and found your current residence in the beautiful state of Oregon, you may find a not so beautiful state level income tax on each paycheck, coming out at 9.0%, given you are making somewhere in-between 7,750 and 125,000 dollars per year. 9 Cents to the dollar of your earned wages goes to the state government, not to mention a federal rate of 10-28% depending where you fall on that same scale. Although that is a large percentage, we are looking solely at state income tax. Corporations have also had an income tax since 1955.

Florida, comparably, has a slightly smaller number, being 0% state income tax, although federal is the same across the board. Although Florida does has corporate income tax, being 5%, instituted in 1971. Florida also had a ‘intangible property tax’ but that has been revoked since 2007. Immediately when you are presented with this information, you will think: “What is different about Oregon and Florida, and will affect decision making...
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