I know there is city tax, state tax, and federal tax. My question is, who has first priority? So if federal has tax bracket first of 28%, when they tax you, you will have LESS taxable income. So NYS would have less taxable income since the feds already took 28% or is it regardless if you make 50k, they tax you that %?
Taxes would go up on the richest the most and increase less for the lower classes. I am not really sure how much the increase would be but under a system like this it would look like the poor are paying much more than they actually are. Why should the rich pay more in taxes? Well mostly because they make their money off of the sweat of those below them. Of course, if we withdrew from Iraq and paid down the national debt it would take a while but the government would have a lot more money to spend on, well, the government. What IS the annual interest cost on 9 trillion dollars these days anyways?
rtfm is right, but some states do actually allow a deduction for federal taxes paid. Each state in the end is different than the next. There is no simple way to explain any of it.
No, all of the taxes, federal, state, and local, are calculated on your total income before any of the others are deducted.
NYS and NYC tax you on all the income, not on the amount that is left after paying other tax. You do not have less taxable income for either of these taxes. For federal tax, you have the option to deduct either (a) a standard (fixed) amount, (b) state and local income tax, or (c) state and local sales tax, but only one of these. For example, if your federal bracket was 28%, your NYS bracket was 6%, and your NYC bracket was 4%, then you would pay a total of 10% to NYS and NYC and would have the option to pay the federal government (a) 28% of the remaining 90%, (b) 28% of the difference between the original 100% and the amount of sales tax paid, or (c) 28% of the difference between the original 100% and the standard deduction. This is over-simplified. I have not mentioned other deduction that do not directly relate to your question and have not considered how your choice to deduct state and local tax or take the standard deduction might change your bracket.
