CT Governor Proposes A Coupon Tax...Coupon Users To Pay Tax On Full Price Of Purchase

[werepossum]

This could have amusing consequences.

1. This Buick costs $100. However, this year it's on sale for $28,000 with coupon, and all these are reserved for our big coupon sale.
2. Pay taxes on $100.
3. Big savings!

 

[spidey07]

Seriously...How many millionaires sit down at night to cut coupons or do a meal budget so they know exactly what they can spend and plan it all out...

A LOT more than you think.

 

[werepossum]

A LOT more than you think.

Most millionaires I've known are very, very thrifty. Most of them never earned a huge amount of money, rather they were skilled at not spending what they did earn. (Of course, the ones who aren't I'll probably never meet.)

 

[dfuze]

That isn't me dude, I'm with you on that. On the flip side, I've seen CT drivers come up to MA and get lost in the rotary...funny stuff.

I hate your rotaries in western MA

 

[bamacre]

This could have amusing consequences.

1. This Buick costs $100. However, this year it's on sale for $28,000 with coupon, and all these are reserved for our big coupon sale.
2. Pay taxes on $100.
3. Big savings!

LOL

Kinda like paying your employees $10 an hour, but paying them with ten Silver American Eagles.

 

[Zebo]

So you're screwed if you buy a bicycle in Connecticut and register it in New York.

 

[Zebo]

That's a direct tax on the poor and middle class, and at a time when they are hurting. And this is in the NE, land of the party for the poor?

They can't go after the rich, that's who allows them to run.

 

[feralkid]

They went full on LOLibtard. Never go full libtard.

Do you work or pay taxes?

 

[Wreckem]

Uh most states already do this.

In some instances stores expressly state patrons have to pay taxes on the full price when using coupons, mainly because the store is still responsible for the full sales taxes in many states.

The problem with this bill is lumping sales tax on the full price with items that are on discount with sales tax the full price with coupons.

Items that are discounted, the retailer typically is not reimbursed for the remainder of the full cost. With coupons they are.

Like I said most state, and some stores charge sales tax on the full price when using coupons. That should never be applied to discounted items.

 

[Thump553]

Seriously...How many millionaires sit down at night to cut coupons or do a meal budget so they know exactly what they can spend and plan it all out...

There's an excellent and very true book out called The Millionaire Next Door: Surprising Secrets of America's Wealthy by Thomas Stanley that is very well worth reading. Between my clients, family and acquaintances I probably know at least a dozen of such people. Some common factors:
-they are extremely quiet about their wealth, unless you are close family or work with their finances, you'd likely never know
-yes they do meal budgets and clip coupons more often than not. I could tell you dozen of anecdotes along those lines. Not pissing away money on little or big things is almost a universal trait in this class. Their cars and houses are generally modest and paid for (think three year old Buicks as opposed to flash cars).
-common sense (so rarely consistently exercised by so many of us) is the dominant trait
-They won't admit it, but some good luck has a substantial role-they successfully avoided life's "routine" tragedies like messy divorces, long periods of unemployment or bad health, leech adult kids, etc.

 

[Zebo]

There's an excellent and very true book out called The Millionaire Next Door: Surprising Secrets of America's Wealthy by Thomas Stanley that is very well worth reading. Between my clients, family and acquaintances I probably know at least a dozen of such people. Some common factors:
-they are extremely quiet about their wealth, unless you are close family or work with their finances, you'd likely never know
-yes they do meal budgets and clip coupons more often than not. I could tell you dozen of anecdotes along those lines. Not pissing away money on little or big things is almost a universal trait in this class. Their cars and houses are generally modest and paid for (think three year old Buicks as opposed to flash cars).
-common sense (so rarely consistently exercised by so many of us) is the dominant trait
-They won't admit it, but some good luck has a substantial role-they successfully avoided life's "routine" tragedies like messy divorces, long periods of unemployment or bad health, leech adult kids, etc.

Yup I read that when i was ~13 should be required reading. If you're frugal and I mean frugal - you don't buy anything unless it makes you money or necessary for survival - it's easy to become a millionaire. Course higher income the faster it goes.

 

[lothar]

Because they assume you're going to pay the Use Tax come tax time.

Way to miss the point.

Case in point:
A bicycle costs cost $100.
If MA's tax is 10%, you pay $110. $10 of that goes into the coffers of the MA state government.

If you're a MA resident and buy the bicycle in CT where they probably charge a 5% tax, you would pay $105. $5 of that goes into the coffers of the CT state government.

A few points:
1.) Technically, you still owe $5 tax to MA which is the difference between CT and MA sales tax...Of course not many people pay that.
2.) CT state government still gets $5 in revenue. CT does NOT reimburses MA government the revenue it got. So instead of MA getting $10 from it's own residents and CT getting $0, CT is getting $5 and MA has the potential to get the remaining $5.

If CT decides to implement this coupon tax or increases it's own sales tax, CT loses the revenue they get from MA residents, and some residents of their states may start shopping elsewhere instead of CT. MA residents would either buy in MA or buy from another state. I'm sure MA government would be happy to get some of it's money back, along with picking up a few from CT residents and would be laughing all the way to the bank at this tax proposal.

 

[lothar]

I'm from CT. First of all, this is the governor's proposal-it still has to be acted upon by the Legislature. Secondly this governor (newly elected in Nov) has surprised me how he is growing into the office. One of his mantras is that the state is going to use generally accepted accounting procedures from here on out-no more smoke and mirrors. He's willing to undertake the pain now to cure our past sins. Its extremely refreshing and unusual to hear a politician from any party say that, but especially refreshing to hear a Democrat say it.

This governor is currently on a set of townhall meetings across the state to get public feedback. He's also actively reaching out to the business community-something no governor here has done in decades. For example, just yesterday he held a public forum with the CFO of United Technologies (Pratt & Whitney, etc.-the major industrial employer in the state)-a person most famous for stating last year that when evaluating locations for new plants "every other place is low cost compared to Connecticut."

His new budget proposal carries a lot of pain with it-increased taxes, vanishing tax exemptions and give backs (the state has given a $550 property tax credit for decades, that will be gone), and if my memory is correct, something like $2B in union concessions.

As far as the $50 clothing exemption, CT has had that for years also (groceries are also exempt from sales tax). You buy some clothes for your kid, no sales tax. You buy a $700 suit it's fully taxable. Eliminating that $50 exemption, the grocery exemption and the $550 property tax credit (along with a similar credit for renters) is going to hit everyone in the state, but I think most people realize it is fair and necessary.

As far as the "coupon tax" goes, I don't think that will pass although there isn't (yet) a huge outcry against it. It's unfair and probably unworkable, especially in this age of "instant rebates" and the like.

Frankly I saw a world of difference between CT's proposed budget and the WI's governor's proposed budget, which will greatly cut state funding of education, etc. while at the same time prohibiting localities from raising taxes to make up the shortfall. I've lived in both states and in many ways I always preferred Wisconsin more, but I can't but help conclude WI is on the way down and CT on the way up in the long term.

I did acknowledge that it was a proposal by stating so in the OP and thread title.

I do like that your elected officials are telling it like it is and not playing political window dressing. Good for them. When I saw this I was like wow...A politician is actually telling the truth?

Benjamin Barnes, Malloy's budget chief, isn't a particular fan of the proposal. But because of the state's deficit woes, the administration is forced to examine the numerous tax exemptions currently on the books.

"It's true, it's a new tax. It sucks," he said. "Every single one of those, however many, 20-odd taxes is a new tax and it sucks. I don't know how to hide it. These are new taxes."

If it looks like a tax and it quacks like a tax, then it IS a tax. No need to play window dressing by calling them fees, penalty, or other stupid things.
Let's call a spade, a spade.

Thank you for your explanation on the $50 clothing exemption.
So buying multiple clothes that cost individually $50 or less in the same transaction doesn't trigger the tax ?

Buying 2 Payless tennis shoes for $49.99 each in the same transaction wouldn't trigger this tax, but buying 1 Nike/Reebok/NewBalance tennis shoe for $50.99 will trigger it?
Basically I'm trying to understand...Is it based on the price of the individual items themselves or the price of the individual transaction?

 

[Fern]

-snip-
His new budget proposal carries a lot of pain with it-increased taxes, vanishing tax exemptions and give backs (the state has given a $550 property tax credit for decades, that will be gone), and if my memory is correct, something like $2B in union concessions.

In your description of his budget proposals, each element listed looked to be a tax increase. I.e., all were on the revenue raising side.

What, if anything, does he propose on the spending cut side?

Fern

 

[Lithium381]

i think paying tax on the price of the item is fair, for example, the $10 bottle on sale for $8, pay tax on $8.....if you have a coupon, great, but you pay the tax on the amount of the item

 

[Lithium381]

Way to miss the point.

Case in point:
A bicycle costs cost $100.
If MA's tax is 10%, you pay $110. $10 of that goes into the coffers of the MA state government.

If you're a MA resident and buy the bicycle in CT where they probably charge a 5% tax, you would pay $105. $5 of that goes into the coffers of the CT state government.

A few points:
1.) Technically, you still owe $5 tax to MA which is the difference between CT and MA sales tax...Of course not many people pay that.
2.) CT state government still gets $5 in revenue. CT does NOT reimburses MA government the revenue it got. So instead of MA getting $10 from it's own residents and CT getting $0, CT is getting $5 and MA has the potential to get the remaining $5.

If CT decides to implement this coupon tax or increases it's own sales tax, CT loses the revenue they get from MA residents, and some residents of their states may start shopping elsewhere instead of CT. MA residents would either buy in MA or buy from another state. I'm sure MA government would be happy to get some of it's money back, along with picking up a few from CT residents and would be laughing all the way to the bank at this tax proposal.

(i'm in ca)in my naive years, my tax preparer asked me if i bought anything online from another state....i said sure lots of stuff. i found out california wanted to tax me the california rate(10%) on anything i'd purchased out of state........what a load of crap!
if there is an item for $100 locally and an $110 item online in NV(assume free shipping)....geuss what i'm going to buy in NV because F U california

 

[lothar]

i think paying tax on the price of the item is fair, for example, the $10 bottle on sale for $8, pay tax on $8.....if you have a coupon, great, but you pay the tax on the amount of the item

Scenario #1:
'09 Honda Accord V6 EX-L...
"MSRP", list, sticker price: $30,000+
Sale price: $24,000
Should I have to pay tax on the $6,000+ I saved off the list price when I negotiated with the dealer?

Scenario #2:
Sell your used car to a dealer for $4,000 and use it as a down payment towards a $20,000 car.
Should you owe tax on the $4,000?

 

[lothar]

(i'm in ca)in my naive years, my tax preparer asked me if i bought anything online from another state....i said sure lots of stuff. i found out california wanted to tax me the california rate(10&#37 on anything i'd purchased out of state........what a load of crap!
if there is an item for $100 locally and an $110 item online in NV(assume free shipping)....geuss what i'm going to buy in NV because F U california

I was under the impression that you only pay the difference between that state and yours...
If CA requires you to pay all of it to CA even though you already paid some elsewhere, then is even more fooked up than I thought it was.

 

[Thump553]

I suck at multiple quotes so bear with me:

Lothar (post 38): presently, so long as each item is below $50 no sales tax regards of amount of total purchase, so two pairs of $49.95 shoes, no sales tax. One pair of $75 shoes, full sales tax.

Fern (#39): actually Malloy's proposed budget is pretty much a blend of spending cuts and revenue increases. State subsidies to towns are going to be drastically cut. Most significantly (for a Dem who won a squeaker election with massive union backing) he's proposing roughly $2B in state pension, etc. cuts-something he didn't hide before the election, either. He's also on a major campaign to reduce the bloated management levels of state government.

lothar (#42): One thing I didn't know here is that presently the value of a trade-in car is excluded from sales tax (ie, buy a $30,000 car from dealer, trade in a $5,000 one, only pay sales tax on $25,000). In this mornings paper the car dealers are complaining about a proposal to drop that trade-in sales tax exclusion. How does this work in other states.

 

[CycloWizard]

i think paying tax on the price of the item is fair, for example, the $10 bottle on sale for $8, pay tax on $8.....if you have a coupon, great, but you pay the tax on the amount of the item

The price of anything is what you pay for it. Are discount retailers really going to have to tax on the "list price" shown on their price tags? If so, the tax will often be more than the actual price the consumer pays for the item.