SOAK THE RICH, HURT NEW YORK
March 10, 2008
The New York State Assembly Majority announced recently that it's considering a dramatic increase in state personal-income taxes that will come down hardest on New York City residents and the key industries that are the engine for economic growth across the state, says the New York Post.
- The measure would hike personal-income taxes 1 percent on households earning more than $250,000, 2 percent for those over $500,000 and 3 percent for those over $1 million.
- This translates into a combined city-state income tax of 11.5 percent to 13.5 percent; add in federal taxes, and the burden approaches 50 percent.
- Taxes in New York City already are nearly 50 percent more than in any other U.S. city.
- Adding to that burden as we go into a recession is an admission by some legislators that they have no plan for the state and city economy.
This approach is also a money-loser for the state:
- Gov. Arnold Schwarzenegger last week said that half of California's $14 billion deficit is due to people and business leaving the Golden State because of high taxes.
- If the Assembly measure passes, many of the city's highest earners and biggest taxpayers -- who all enjoy global mobility -- are likely to pack up and leave.
Further, two-thirds of city residents are tenants, many of them low or middle income. The plan offers no benefits for them, but funds a rebate of property taxes to homeowners across the state. This isn't a recipe for tax fairness. It's divisive and offers no relief to city tenants who pay higher rents and tend to have lower incomes than city residents as a whole, says the Post.
Source: Kathryn S. Wylde, "Soak the Rich, Hurt New York," New York Post, March 6, 2008.
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