Submitted 1 year ago by Probius@sopuli.xyz to nostupidquestions@lemmy.world
Just hypothetically, if a state decided to stop receiving money from the federal government as well as intercepting and/or stopping federal income tax payments, could they do it? What might the consequences be?
Please be respectful so that rule 5 doesn’t get broken.
Nope. What they could do is tax corporations that collect them at 100% of whatever they collect on behalf of the federal government and then have a state stimulus payment equal to what was collected.
That would mean that the corporations basically paid people’s taxes for them, right? Wouldn’t that just get factored into salaries?
Now that would be a sight to behold!
No.
I don’t mean legally, I mean “just doing it” regardless of the law.
How would they “just do it”?
Federal taxes do not go thru states. They go from taxpayer to federal government at tax time, and from payroll processor to federal government for withholdings.
You want states out there hacking transactions?
Most payroll providers aren’t based in the same state, and most corporations don’t only operate in one state. Hell, most are headquartered in Delaware.
For the vast amount of Americans that money doesn’t touch any states besides Delaware.
Like, there’s a lot of reasons why what you’re suggesting just can’t happen.
Not sure how this would work as most corporations aren’t isolated to a single state and they’re the ones sending your tax dollars to the feds via payroll deductions. I see this as being similar to banks who won’t allow dispensaries to have bank accounts since they’re still illegal federally even if it’s perfectly legal within the state.
count_dongulus@lemmy.world 1 year ago
No, businesses directly pay the federal government. More insidiously, it’s impossible to opt out if you’re employed full time; you have to be self employed to get to decide when/if/how much tax you send the federal government.
Probius@sopuli.xyz 1 year ago
Could a state order all businesses operating in that state to stop paying taxes?
count_dongulus@lemmy.world 1 year ago
Maybe. But the biggest employers are national if not international. They’re gonna withhold federal tax.
stinerman@midwest.social 1 year ago
Yes, by law. Of course the business will abide by federal law before state law because federal law is supreme.