> Double taxation is a tax principle referring to income taxes paid twice on the same source of income.
and later
> Double taxation also occurs in international trade or investment when the same income is taxed in two different countries.
This state/federal dichotomy for the purpose of taxation is really no different than two countries taxing the same source of income.
Two entities are taxing the same income, and both must be paid. This is double taxation by the definition of the source you brought into the discussion!
> What? This would only be the case if total taxes on your income exceed 100%. And typically, that would then be up to the courts to decide who is the senior creditor that deserves to get paid.
No, it's true regardless of how much I've paid to my state. The 5K is gone. I don't have it. It's deducted from my paycheck. It never hits my bank account. I'm being asked to pay taxes on money I've used to pay taxes.
> I disagree that you truly earned $95k. You earned $100k.
You're probably right that earned was an imprecise phrasing for this. Received, perhaps? Regardless, the point still stands.
And to be clear I'm arguing from the standpoint of what I believe the principles ought to be, not of what the law is. As you state, when asking for money that I truly don't have due to contradicting demands on my income, courts would decide who receives what. I'm just arguing that the law ought to define that hierarchy, and any money already used to pay taxes ought not be taxed again by the secondary payee.
This is not double taxation.
https://www.investopedia.com/terms/d/double_taxation.asp
The federal government charges you x% for its services. The state government charges you y% for its services. The city government charges you z% for its services. The county government charges you a% of some arbitrary "assessed" property value. These are different entities who have the power to tax you.
>Why can the federal government tax money that can only possibly be in my pocket if I've committed tax fraud against my state?
What? This would only be the case if total taxes on your income exceed 100%. And typically, that would then be up to the courts to decide who is the senior creditor that deserves to get paid.
>Now, I have to pay the federal government. Why should I be on the hook to pay taxes on 100K in income, when I truly only earned 95K?
I disagree that you truly earned $95k. You earned $100k.
In theory, it could be problematic if all of your taxes add up to >100% of income, but I think that's more incentive for people to participate in their government and make sure that doesn't happen. But I don't see why a state that mismanages their defined benefit pensions and infrastructure, and hence has high taxes due to shifting costs from 30 years ago to today, should be getting a benefit for it.