N.Y.'S TAX HABIT IMPEDES PROGRESS
April 9, 2008
New York is like an addict requiring a tough love intervention. The proposed New York state budget continues a tradition of failed Keynesian fiscal policy, namely self-destructive taxation and unsustainable spending, says Jonathon Maurer.
New York can look forward once again to claiming the honor of ranking last in the category of "government and fiscal policy" as it did in the 2007 Beacon Hill Institute State Competitive Index:
- New York state taxes are second highest in the nation at 13.8 percent, according to a 2007 Tax Foundation analysis.
- Per capita, New Yorkers pay $1,647 more in local taxes and $416 more in state taxes than the national average per year.
- This combined total of $2,063 "per capita" suggests that families may pay multiples of this figure.
- New York corporate taxes are third in the nation and more than double the national average.
- And to top it off, New York has borrowed $5,117 per capita more than the national average.
New York spends most of its tax excess on education and welfare:
- New York ranks first in both education and welfare spending with $601 and $991 per capita, more than the national average respectively, according to the 2004-05 Census.
- Despite this "investment" in education, the state ranks 35th in educational attainment, 43rd in high school graduation rates and 44th in SAT scores according to Education State Rankings of CQ Press.
New York's sizable welfare program has been criticized for high benefit levels and ineffective sanctions, says Maurer. The Medicaid program is New York's crown jewel of largesse. The state spends $2,165 on Medicaid per capita, which is two-and-one half times the national average, according to the 2006 National Center for Policy Analysis report, "Medicaid Empire."
Source: Jonathon Maurer, "N.Y.'s Tax Habit Impedes Progress," Democrat and Chronicle, April 9, 2008.
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