PDA

View Full Version : New Yorkers' absurd tax burden!



londonlawyer
September 9th, 2004, 04:09 PM
This article was posted on cnn.com on Sep. 9, 2004.

New York's tax burden is absurd. I pay higher taxes here than I did when I lived in the U.K. The property taxes in the NYC area (Westchester, in particular) are absurd!!!

Anyway, here's the article:

"New Yorkers bear biggest tax burden:
Study finds N.Y. residents pay $131 for every $1,000 earned, Tennessee taxes residents the least."

September 9, 2004: 2:06 PM EDT

NEW YORK (Reuters) - New Yorkers pay the highest state and local taxes in the nation, shelling out nearly $131 for every $1,000 of income in 2002, according to a new study.

Tennessee taxed its citizens the least, with residents paying just under $84 for every $1,000 of income, according to the Massachusetts Taxpayers Foundation.

Massachusetts, ridiculed in the 1980s as "Taxachusetts," fell to 40th in 2002, as its residents only paid $96 in taxes for every $1,000 of income.


The Boston-based business group assessed states' competitiveness using the most recent data available, as taxes often play a big role in a company's decision to expand or relocate to a state. For years, New York business groups have argued that high taxes have hurt job growth.

"For Joe Blow, I think (the study) provides him with some context for his own feelings about what the tax burden feels like," said Cam Huff, senior research associate with the Massachusetts Taxpayers Foundation.

Five states have no personal income tax, and at least two of them, Florida and Nevada, are among the fastest-growing in the nation.

New York's tax system is the nation's most progressive, however. Its residents paid just more than $44 in personal income taxes per $1,000 of income, up from about $2.50 from 1992.

When the total bill for state and local taxes and fees was examined, the average U.S. resident paid out more than $152 per $1,000 of income. That was down $6 from a decade ago, which suggests some states cut levies fairly aggressively.

Arizona, for example, fell to 39th from 18th. It assessed just under $144 per $1,000 of income, about $20 less than in 1992.

Hawaii has the most regressive tax system when it comes to sales and excise taxes, which sock the poor hardest. Hawaiians pay almost $64 per $1,000 of income in these levies. But the state also relies heavily on tourists, who get hit too.

Oregonians paid the least in this category, at just under $9.

Property taxes, which can bedevil homeowners, were highest in Maine, at nearly $55 for every $1,000 of income. New Hampshire came in second at just over $51, trailed by New Jersey, where the levy topped $48.

Alabama was last in this category. Its property taxes only added up to slightly more than $13 for every $1,000 of income. Delaware came in 49th, at just less than $16 per $1,000, while Arkansas took the 48th spot at just over $16.

ryan
September 21st, 2004, 01:49 AM
Taxes are the dues we pay to live in a democracy. New York State provides more/better services, e.g. some of the best public schools and colleges in the country, than most other states (Westchester has some of the highest per capita school spending in the country btw) . Snow removal, repairs to winter infrastructure damage and massive public transportation infrastructure are just a few unique costs we have to pay (off the top of my head).

It is costly to support a massive urban population, and we also pay too much for housing, food and insurance. Cheap states have small populations and provide fewer services, but would you want to live in one?

BrooklynRider
September 21st, 2004, 02:14 PM
If New York did not have to send its taxes to Albany to bolster the rest of this state, we'd be fine and taxes would go down. Beyond the metro area of NYC, New York is the Alabama of the Northeast.

ryan
September 21st, 2004, 07:53 PM
Without starting an upstate/downstate argument... I would hardly characterize NYC as "bolstering" NYS. NYS just recently bailed out millions of $$ of NYC debt from the '70's. I think there is more of an inbalance between the funds that flow from NYS to the Federal government. Upstate NY has been economically dead for 60 years due in large part to a tax code and laws written with NYC in mind, and all state attention focuses on NYC crises.

Upstate NY is a hell of a lot nicer than Alabama. Have you ever been to either?

BrooklynRider
October 25th, 2004, 11:27 AM
I owned a 17-acre horse farm property in the Adirondack Park for quite a period of time, up on Chazy Lake - by Lyon Mountain. I lived there. Plattsburgh was the "big city". It was enjoyable. I know the North Country quite well. I stand by my comparison.

TLOZ Link5
October 26th, 2004, 12:23 AM
Without starting an upstate/downstate argument... I would hardly characterize NYC as "bolstering" NYS. NYS just recently bailed out millions of $$ of NYC debt from the '70's. I think there is more of an inbalance between the funds that flow from NYS to the Federal government. Upstate NY has been economically dead for 60 years due in large part to a tax code and laws written with NYC in mind, and all state attention focuses on NYC crises.

Not true. More state aid per capita goes to municipalities upstate than to New York City. It's a twisted balance if you factor in the supposed tax code and laws with the City in mind. And NYC, tax code and laws notwithstanding, is the economic engine of this state, which is something that the state recognized in the 1970s.

Upstate was a prosperous region for many, many years thanks to the momentum from the Erie Canal and the proximity to the Great Lakes. Using upstate cities like Buffalo and Rochester as international transshipping ports was just good business. Most historians will tell you that upstate's decline began back in the 1950s, when two things happened: a lot of the people and manufacturing jobs up north moved south for better climes and cheaper cost of living/operating, in a pattern repeated throughout the country; and the Saint Lawrence Seaway opened in 1957, which meant most ships could simply bypass upstate ports. Upstate cities like Buffalo simply failed to modernize; political corruption and cronyism became — and is still — rife; etc, etc.

Upstate really has no one to blame but itself for what's become of it.

Broome County Guy
December 7th, 2004, 02:14 PM
I was surfing around and stumbled into this web site. Don't know if I will be a regular here, but I had to respond to this thread.

Up here, in Broome County, about 180 miles from you, we have the opposite view. There is a lot of hostility toward "the City." Yes, we have Binghamton University, with about 12,000 students, many of whom come from downstate and that is the main reason people point to when looking for a concrete benefit from New York City.

However, for every student that comes here, looking for our particular balance of city and countryside, there is at least one other type of "immigrant" that shows up from downstate just looking for the easy benefits. Its almost as if welfare reform never took place in New York. It is putting a huge strain on Binghamton's and Broome County's Social Services...to the point where Medicaid has become 80% of my property taxes.

As for NYC contributing a surplus to Albany every year, and citing sources going all the way back to the '70's, or at least to the '90's. Are there any recent, objective, non-convoluted sources for this? I have heard our local municipalities claim the same thing. Everybody can claim they send more to Albany than they get back because Albany is so inefficient.

Earlier this year, our local paper cited a University of Buffalo study that found that, during good stock market years, NYC does indeed send more upstate than they get back. A tribute to your financial district. During bad, or so so years, the flow is reversed. This year is a so so year.

This all doesn't even include the abuse we've taken from you lately: We are refinancing your "Mac" debt. You were doing a good job paying off that liberal financial recklessness from the '70's. You were almost done. Now it's New York State's problem, for $170 million per year until 2034. Thanks a whole bunch.

We are going to help you pay for your new stadium in Manhattan to the tune of $300 million. I can hear Mayor Bloomberg brag to John Gambling, on WABC about it. Hey, it's a great deal, so we need a subsidy for it. Why don't you use your Battery Park City Authority to pay for it? Put the 2012 Olympics in the Meadowlands if you have to. This is financial recklessness okay?

And just this past week; a "Manhattan Court-appointed panel" has stated that we're going to pay $5.6 billion each year for the next five years and it's just going to New York City Schools. My kids went to a district on the outskirts of Broome County that gets about 30% of it's money from Albany, and we spend about $11,000 per kid per year. I can't help it that your kids cost a couple thousand more because of the city environment. It's your choice to live there. Our State Senator says we don't have the extra money for you either.

The problem with New York is that it's run by liberal Republicans and even more liberal Democrats.

TLOZ Link5
December 10th, 2004, 06:11 PM
"I was surfing around and stumbled into this web site. Don't know if I will be a regular here, but I had to respond to this thread."

Hello! ::waves::

"As for NYC contributing a surplus to Albany every year, and citing sources going all the way back to the '70's, or at least to the '90's. Are there any recent, objective, non-convoluted sources for this?"

http://www.cityproject.org/publications/reports/LookingHelp.html

" The remaining $2 billion of the Mayor's revenue strategy comes in part from proposed increases in aid from the state and federal governments, to which we send, respectively, $3.5 billion and $6.3 billion more annually than we receive in aid."

That article is from early 2004.

There is little doubt among economists that New York City carried the economy of the state in the 1990s. I have yet to see signs pointing to any sort of revival upstate.

"I have heard our local municipalities claim the same thing. Everybody can claim they send more to Albany than they get back because Albany is so inefficient."

And which municipality contributes more to the overall economy of the state, NYC or Buffalo?

"This all doesn't even include the abuse we've taken from you lately: We are refinancing your 'Mac' debt. You were doing a good job paying off that liberal financial recklessness from the '70's. You were almost done. Now it's New York State's problem, for $170 million per year until 2034. Thanks a whole bunch."

"We" didn't ask "you" to refinance the debt. Contrary to popular belief, there's no single-minded City mentality as if upstate owes us regarding our deficit. Don't make assumptions to the contrary.

"We are going to help you pay for your new stadium in Manhattan to the tune of $300 million. I can hear Mayor Bloomberg brag to John Gambling, on WABC about it. Hey, it's a great deal, so we need a subsidy for it."

The money is not going to the stadium, but to the platform over the railyards that are the site of the stadium. Regardless of geography, the stadium has been heavily contested and is a hot topic even on this forum.

"And just this past week; a 'Manhattan Court-appointed panel' has stated that we're going to pay $5.6 billion each year for the next five years and it's just going to New York City Schools. My kids went to a district on the outskirts of Broome County that gets about 30% of it's money from Albany, and we spend about $11,000 per kid per year."

So $5.6 billion for 1.1 million students in the City amounts to, what, $5,100 per student per year? $11,000 per student per year is just about what New York City pays, too.

"I can't help it that your kids cost a couple thousand more because of the city environment. It's your choice to live there. Our State Senator says we don't have the extra money for you either."

You realize, however, that the school system has been an unfortunate victim of circumstance for four decades; a large portion of it has been neglected, overcrowded, and underfunded for years. What is the current quality of your kids' public school?

The current program to revamp the school system requires money for improvements other than paying teachers. New schools need to be built, existing schools renovated, and new, better classroom equipment purchased.

"The problem with New York is that it's run by liberal Republicans and even more liberal Democrats."

The problem with New York is that it's divided between an intensely urban area and an intensely rural region whose agendas are inherently incompatible.

Broome County Guy
December 13th, 2004, 05:59 AM
"The problem with New York is that it's divided between an intensely urban area and an intensely rural region whose agendas are inherently incompatible."

Yes, you could definitely say that. Up until a couple of years ago, I used to drive a tractor-trailer into NYC, delivering food and paper products to Wendy's and Popeye's in Manhattan and Brooklyn. Many of them get their supplies from a warehouse up here, in Broome County. I could feel the extra tension just going across the George Washington. Better get this mostly done before sunrise. A tractor-trailer is not where you want to be, on many NYC streets, during the day.

Having country roads at the end of my driveway, for my motorcycles, and snowmobile trails connecting to my back yard, for my Ski-Doo and heating my house with wood as I write this, I can say I wouldn't move to New York City at gunpoint.

"There is little doubt among economists that New York City carried the economy of the state in the 1990s. I have yet to see signs pointing to any sort of revival upstate."

That's just what I'm talking about with the stock market. The '90's contained the technology, and dot com bubble. For the past ten years, New York's budget has depended too much on Wall Street. The technology and dot com heavy NASDAQ went to 5048. New York's security-industry employees paid billions in extra taxes to Albany, definitely more than their share. That seemingly ended in March of 2000, with the Pennfield Jackson ruling over Microsoft being a "monopoly." Within weeks, the NASDAQ fell to little more than half of what it was and it didn't hit bottom 'till it hit 1111, sometime in late 2002.

http://finance.yahoo.com/q/bc?s=^IXIC&t=5y

Hope that link works. This year, it's been bouncing above and below 2000. It's been a so so year in the stock market. It was in the news, last week, that security-industry employees don't even know what their year-end bonuses will be yet. ...or what they'll pay in state taxes. I'm not sure I'm ready to accept that NYC just pays an extra, unswerving, $3.5 billion annually to Albany.

"So $5.6 billion for 1.1 million students in the City amounts to, what, $5,100 per student per year? $11,000 per student per year is just about what New York City pays, too."

Maybe it's hard to say exactly what New York spends per student since it varies more in New York than anywhere else, from district to district. Broome County is guilty of some waste of its own. We have twelve school districts, with twelve different super-intendants, for a county with 170,000 people. Our district has always figured in maintenance and I would say our schools turn out good graduates, but even our schools spend too much.

The newspaper articles I wanted to cite wanted me to log in. I thought it's closer to $13,000, with the extra $5,100 on top of that. Whatever the number is exactly, you have us safely outdistanced now, and Mayor Bloomberg doesn't seem to want to be much help. Governor Pataki is, at least, trying to address accountability, like we have upstate.

http://www.freerepublic.com/focus/f-news/1292299/posts

"For the city to fund even a portion of this $5.63 billion would require us to cut after-school programs, close libraries and make severe cuts to essential city services, even in the area of public safety, Such actions would harm the very children this lawsuit is designed to help." Mayor Bloomberg's attitude.

"We are particularly concerned that the recommendations appear to reject any type of real reform and fail to overhaul the current accountability system, while recommending a substantial infusion of new spending," Kevin Quinn, reflecting Governor Pataki's attitude.

"And which municipality contributes more to the overall economy of the state, NYC or Buffalo?"

I think Buffalo is on life-support, with all the heavy industry they have lost in the last fifty years. Don't know if I can speak for them. NYC contributes more to the overall economy, but there is something else in this equation that I don't think I can prove:

We have a second home, albeit a mobile home, near Lancaster, PA. My wife works at a couple different hospitals in the Philly area and the trailer saves her a four hour commute each way. The money is twice as good down there. Pennsylvania is still a relatively low tax state, although Liberal Governor Rendell is trying to change that. Upstate NY attitude is very much like most of Pennsylvania. Pennsylvania has a 3% maximum income tax. Pennsylvania has a $21 billion overall state budget!

New York spends almost exactly twice as much on Medicaid alone as Pennsylvania spends on everything. New York has a 7% income tax with tons of mandates for its counties. New York City has a budget more than twice as big as all of Pennsylvania and Mayor Bloomberg doesn't have any money...or "monies" as he puts it.

This is a chronic, long term problem for upstate. It is my firm belief that, without the downstate influence, upstate New York would have a business environment much more like low tax Pennsylvania than like high tax New Jersey, like it does now. Pennsylvania has some problems but they're nothing like New York's.

How's this for a conundrum? We have a power plant, right in the middle of Binghamton that spends most of its time turned off. You can see it from route 17. We pay 50% more for electricity in NY than we do in PA. The power plant turns on when electrical demand in NYC goes up and we sell it to you! Yet, most of our industries that have left our area say they left because of high taxes and high utility rates! Go figure.

Scott
Ssaund9084@aol.com

It's 5:00 in the morning. I am tired and will come back later.

dtolman
December 16th, 2004, 11:47 AM
Broome County Guy,
I lived in Binghamton for a number of years, and still visit it quite often. But to complain about the financial burden NYC and environs put on Broome County is a joke...

Binghamton is probably one of the few communities in upstate NY that was able to weather the disappeance of update manufacturing relatively intact - one of the main reasons for that is its relative proximity to NYC.

Real estate prices are rock bottom, job opportunities in Broome are better than in a number of places in the state - all in all Binghamton is one of the few places in the country where you can live comfortably on a near-minimum wage job.

Lets face it, Binghamton has faired a lot better than other places in upstate for only a few reasons:
-SUNY Binghamton - which is directly/indirectly the economic engine of Vestal and most of the area south of the river - and SUNY Binghamton is 80% downstate attended
-The minor miracle that IBM Federal Systems (now Lockheed Martin) wasn't closed down when it was sold off
-It is the defacto shopping center of the lower tier - if you want to go to a mall in central NY, eat in restaurant, etc - you either have Syracuse up north or Binghamton in the south.

The real problem in upstate is the failure to replace lost manufacturing jobs. When the shoe business stopped being the economic engine of Binghamton - it was lucky to have other avenues to fall back on... but a lot of other communities weren't as lucky - and I don't know if any of them have figured out what to do to replace manufacturing yet either...

Broome County Guy
December 22nd, 2004, 11:32 AM
Okay, forgive me if this sounds kind of rambling...

"SUNY Binghamton - which is directly/indirectly the economic engine of Vestal and most of the area south of the river - and SUNY Binghamton is 80% downstate attended."

Yeah, Like I said, Binghamton University, which is really in Vestal, is the one big item that people here point to and say New York City does us some good. I used to work part-time as a Tattooist in the '90's, up here, and I tattooed a good many of them. They couldn't get one down there 'till '97. I'd like to think SUNY is an even deal for them. They get a good price on an education. We have a developer building a huge addition to the dorms for them, just over the hill at the old Vestal Plaza. Almost sent my older daughter there, but she wanted to go to a private college in Albany instead.

Our proximity, also brings in a lot of other City folks though. The rock bottom real estate prices, mostly in Binghamton, Johnson City, or Endicott itself, bring in the Section 8 Housing Voucher demographic. These are usually single parents and the kids overwhelm local high schools. Kids getting tattooed for their 18th birthday used to say the "City" kids weren't up to grade level and they would move in and try to disrupt and take over the place.

Wish I had kept the newspaper article, now, that I am writing this but, the new Broome County Jail has a sizable NYC population. Just before election day, the Broome County Legislature tried to allocate county money so that we could repatriate as many New York City residents as we could. Apparently, many of our criminal demographic have prior warrants in the City, and money to repatriate them has recently dried up in the state budget. The allocated money wasn't to send them back to Syracuse, or to Utica or to Jamestown. The newspaper specifically referred to New York City. They only managed to set aside $56,000 which wasn't enough.

"The real problem in upstate is the failure to replace lost manufacturing jobs."

True, the real problem with upstate, is its inability to replace manufacturing jobs. I remember when Broome County felt that its economy was recession proof because we had so many companies that were defense industry oriented. Since before a time where I can remember (I'm 43), residents around here seemed apathetic to how New York went it's own way with taxing and spending because we were still getting ours from the Cold War economy. Oh, yeah, there was also Endicott Johnson, our shoe industry.

Now, ten years later, I think a lot of them are still apathetic. It goes back to the post that started this thread; New York does have an absurd overall tax burden. We have a radio talk show host up here that just brought up some statistics that puts New York either first or second, or last or second to last, whichever is worst, in any category you want.

Tax Freedom Day April 27, the second to last in the nation, in 2004, and sixteen days after the National Tax Freedom Day.

New York's business climate ranks 49'th in the nation. The study took income taxes, corporate income taxes, sales taxes and tax complexity into consideration. We're behind all our neighboring states and way behind Pennsylvania, whom I mentioned earlier.

Our State/Local tax burden is the highest in the nation, about 12.9%, way above the national average of 10.0%.

New York's property taxes are among the highest at about $1333 per person.

New York has the highest gasoline tax, at about 32 cents per gallon, and the 2nd highest cigarette tax, at $1.50 per pack.

http://taxfoundation.org/newyork/index.html

New York is also the second highest when it comes to paying its state and local government public employees. On average of $51,445, 26% more than the national average. But, on the other hand, we have 62 of them for every thousand people in New York, 14% more than the national average to make it more even expensive.

http://www.bcnys.org/whatsnew/2004/1029govtemployrelease.htm

One could wonder why any Fortune 500 company, or any manufacturer, would want to bother with this mess, but I guess the numbers all say that there has been healthy growth downstate. That's hard to figure, since the taxes are even higher down there.

According to a recent article in our newspaper, which I can't cite because our local paper's web site sucks, New York City is fortunate to have a good reputation going for it.

"New York City, now home to about 2.9 million people born outside the country, had far more foreign-born citizens than any other American city. They account for almost 40 percent of the city's population. And confounding some expectations, most of the immigrants soon become productive citizens. As the wave of immigrants broke over the city, welfare rolls, already down dramatically from a decade earlier, stayed down. A strong case can be made that the most important difference between New York City's dynamic economy and the relatively lifeless status of many upstate cities is the continued attraction of the city for overseas immigrants. Despite its high taxes, strangling regulations and choking traffic, New York City retains its reputation overseas as a place where hard work can lead to a better life."


On another angle about New York taxes, take IBM; I don't know how long ago you lived here, dtolman, but if it was within the last ten years, you could remember IBM using their clout, and challenging their assessment and taxes, while they downsized their presence here. Yet they are have built a new $2 billion computer chip manufacturing plant in East Fishkill.

We haven't had one company show an interest in our area, anymore, unless they can have "Empire Zone" status. We have had some growth in manufacturing and warehouse/trucking industry, using these zones, but most companies see Empire Zones as a temporary tax gimmick that makes us temporarily competitive with other states. IBM must have had sort of similar, permanent deal to stay interested. Otherwise, we just aren't a competitive state.

Kris
December 29th, 2004, 02:55 AM
December 29, 2004

Doing Business Is Too Costly in New York, Policy Group Says

By AL BAKER

ALBANY, Dec. 28 - Even after a decade under a Republican administration that made tax cutting a priority, New York State still burdens its businesses with such high taxes and other costs that its ability to create and keep jobs is being hurt, a business lobbying group said on Tuesday.

In updating its report on the price of doing business in the state, the group, the Public Policy Institute of the Business Council of New York State, said it had found that many costs - including the average premium for health insurance, the average cost of a workers' compensation case, the retail price of electricity and natural gas and unemployment insurance taxes - are higher in New York than in most other states.

The report comes at a time when the state and its agencies - most prominently, the Metropolitan Transportation Authority and the Education Department - are facing enormous gaps between their needs and state revenues. Some officials have said the state needs to re-examine its tax structure to find ways to increase revenue to deal with its $6 billion deficit, but, in a preview of the debates certain to dominate the forthcoming session, the Business Council made it clear on Tuesday that it wants taxes to go down.

Robert Ward, director of research for the business group, said that the Pataki administration had made some progress in reducing the tax burden, but that recent tax increases had trimmed the progress back.

"We have made some progress, but we still have a long way to go," Mr. Ward said. "Unfortunately, in the last couple of years, looking at taxes, we have gone backwards. We have raised taxes much more than most other states, both at the state and local levels, and that is going to hurt us."

To help close an $11.5 billion budget gap in 2003, the state instituted a surcharge on taxable earnings of more than $100,000 for single people or more than $150,000 for married couples. That surcharge, which raised the state tax rate to 7.5 percent from 6.85 percent for that group, is set to expire at the end of next year, and Mr. Ward said he saw no reason for politicians to extend it.

The state also increased the sales tax on clothing items costing less than $110, an increase that is set to expire in the coming year, Mr. Ward said.

A study last year by the Citizens Budget Commission found that New Yorkers pay more of their income in local taxes than residents of any other state. Mr. Ward said that Census Bureau figures from 2002 showed that New York also ranked high in the categories of property, sales, income and corporate taxes.

At the same time, those who are employed in the state are generally earning less money than they could, Mr. Ward said, because the high taxes and business costs tend to divert money from payrolls. The result is that New York is a poor choice for businesses and workers, he said, with many urban areas in upstate New York losing economic vitality.

Reaction to the report was mixed in the State Capitol on a day when lawmakers were on vacation before the new legislative session is set to begin next week with a speech by Gov. George E. Pataki.

Frank J. Mauro, the executive director of the Fiscal Policy Institute, a nonprofit research organization financed, in part, by money from unions, said one part of the business council's own figures show that New York actually has a lower cost of doing business than all of its neighbors except Pennsylvania. Mr. Ward said that fact was only one in a number of measures that the group used and did not detract from its overall premise.

Edmund J. McMahon of the Manhattan Institute, a conservative policy group, said the report underlined the "big policy failures" of the triumvirate that has held power in Albany for the past decade: Mr. Pataki; Joseph L. Bruno, a Republican and the majority leader of the State Senate; and Sheldon Silver, a Democrat and speaker of the State Assembly.

"It highlights the disconnect between Albany and the real world," he said. "That the state is in so much trouble, competitively, and none of the key players up here have any intention of dealing with it."

A spokesman for Mr. Bruno pointed out the Senate's efforts in creating economic development programs, which Mr. Ward praised but said were too limited. "This report makes it clear that much more needs to be done to make New York State more competitive," said the spokesman, Mark Hansen.

Todd Alhart, a spokesman for Mr. Pataki, said the administration would review the report, but argued that no one was fighting harder than the governor to cut taxes, create jobs and improve the state's business climate. "Since Governor Pataki took office in 1995, our state has cut 19 different taxes 75 different times to save New York's people and businesses well over $100 billion," said Mr. Alhart. "No state even comes close to matching New York's tax-cutting record."

Copyright 2004 The New York Times Company

BrooklynRider
December 29th, 2004, 01:48 PM
And Now we can watch our state, local and property tax deductions get eliminated under our compassionate conservative leader, George Asshole Bush.


December 27, 2004
Bush Plan Could Imperil Tax Write-Off for New York
By IAN URBINA

s the Bush administration looks to revamp the tax code, New York officials say they are particularly worried about one idea being considered: eliminating the federal deduction for state and local taxes.

If the president pursues this plan, New York State would lose about $37 billion per year in federal tax deductions, more than almost any other state, according to Internal Revenue Service data. The change would affect about 3.2 million households in New York, three-quarters of which are middle- and low-income, tax records indicate.

"This change would be one of the worst things for New York to came out of Washington in a long time," said Senator Charles E. Schumer. "But if they take this route they can expect a serious fight."

With a 7.7 percent maximum state income tax rate, the second-highest in the country behind California's 9.3 percent, New York would be especially affected because its residents use those taxes to take large federal deductions. About 38 percent of households in New York file for some sort of federal deduction of state and local taxes.

New York City residents, who also pay city income taxes, would be especially hard hit as they could expect an 11 percent increase in the amount they pay the I.R.S., or an increase of about $3.4 billion, said Ronnie Lowenstein, director of the city's Independent Budget Office.

Beyond New York, eliminating the federal deduction for state and local taxes would also affect residents in New Jersey and Connecticut. Among the state and local taxes that could no longer be claimed as a deduction would be property taxes, which are particularly high in the New York City region.

Claire Buchan, a White House spokeswoman, said it was too early to discuss specific plans. "The president has yet to appoint the panel that will review the tax code and make recommendations on how it can be made simpler, fairer and more pro-growth," she said. "Until then, he will not rule any options in or out." The president will appoint the panel before the New Year, she added.

But Mr. Schumer said that the administration was already considering certain approaches. "Every plan that I've heard discussed so far by the administration includes the elimination or curtailment of state and local deductibility," he said. "This is definitely something they are already thinking about."

Tax experts say that the reason for such a change would be to offset the cost of certain tax cuts that the White House hopes to make in areas like savings and investment.

Max B. Sawicky, an economist with the Economic Policy Institute, said that eliminating state and local deductions would also enable the administration to adjust the alternative minimum tax, which was created in 1969 to ensure that the wealthy are not able to avoid paying income taxes by taking large deductions. Since this tax is not indexed for inflation, it has increasingly engulfed larger numbers of people. The administration wants to either eliminate or adjust the tax so that fewer people have to pay it each year, a change that could benefit New Yorkers, whose average incomes are much higher than in most other states.

Currently, the alternative minimum tax affects about the top 3 percent of taxpayers in the country. If it is not adjusted it will cover the top 15 percent of taxpayers within 10 years, Mr. Sawicky said.

Changing the alternative minimum tax would cost the federal government at least $400 billion over 10 years, Mr. Sawicky said, which is roughly the same amount of revenue that would be produced by repealing the state and local tax deduction.

But any change to these deductions would likely face strong opposition. "We'll fight this to the death," said Representative Charles B. Rangel of New York, the senior Democrat on the Ways and Means Committee. "Just like last time, we will mobilize the business community, labor, property owners and everyone else in the state because in New York this is about our financial lifeblood."

Mayor Michael R. Bloomberg also warned of the economic consequences of such changes.

"New York City is the economic engine of our country and we already send $11.5 billion more to Washington annually than we get back," Mr. Bloomberg said in a written statement. "This would amount to another federal tax on our citizens and I will fight it tooth and nail."

The last time the White House pushed a similar proposal to repeal state and local deductions was in 1986 as part of President Ronald Reagan's sweeping tax overhaul. That plan was defeated after fervent opposition in Congress.

"Gov. Mario Cuomo practically camped out in front of the White House on this issue last time," Senator Hillary Rodham Clinton said. "We did it before and we'll do it again."

Mr. Schumer added that there was one important difference now from prior years: New York and California, which would be hardest hit, both have Republican governors. "This could certainly work in our favor this time," he said.

Todd Alhart, a spokesman for Gov. George E. Pataki, would not comment on the possibility of a repeal of local and state deductions. But he emphasized that the president and the governor had already delivered large tax cuts that he said had helped improve the economy and create jobs for New Yorkers.

"Since taking office, President Bush has delivered $36 billion in federal income tax cuts to the people of New York, $15 billion of them for New York City taxpayers," he said. "Moving forward, we expect that President Bush will continue his strong tax cutting record for the citizens of this state and all Americans."

Pamela F. Olson, a former assistant treasury secretary for tax policy under President Bush, said, "There is a basic issue of fairness at stake here." States with higher deductions end up paying far less in federal taxes than the states with lower deductions, she said.

But for New York, the repercussions of repealing the deductions would be huge. Around 2.5 million New York households with incomes under $100,000 take federal deductions for state and local taxes. On average, these households would lose the ability to deduct about $5,600 per year.

People in the highest income brackets would also shoulder a significant burden. About 219,000 households in the state with income of more than $200,000 take federal deductions for state and local taxes. These households would lose the ability to deduct about $67,400 on average per year.

Other states would also be hit, especially those with higher average incomes that tend to be Democratic-leaning states. "I think the administration is very aware that it's the blue states that this would most affect," Mrs. Clinton said.

Nationally, the deduction for state and local taxes is one of the largest types of deductions that people take. For the 2002 fiscal year, the most recent year for which data is available, these deductions amounted to about $309 billion nationwide. The deduction for mortgage interest was about $337 billion for that same year. Deductions for charitable contributions amounted to about $139 billion, according to I.R.S. data.

New York officials also worry that the change could lead taxpayers, newly burdened with the added expense of lost deductions, to demand lower local and state taxes.

For some, that is just the point. "If you believe, as I do, that the state and local deductions encourage higher spending in states," said Bruce Bartlett, a domestic policy adviser to Ronald Reagan and a treasury official for the first President Bush, "then abolishing the deduction will help bring this spending down and will also cause people to demand lower taxation."



Copyright 2004 The New York Times Company

dtolman
December 29th, 2004, 02:44 PM
Broome County Guy,
Sorry for the late reply - just got back from a week at Binghamton (and Greek Peak) - just doing my bit for the lower tier economy :)

I certainly agree with you about the tax situation in NY state - but its just another part of the abysmal NY State Goverment that the good people of NY insist on bringing back year after year. Until the stranglehold on power by the triumvirate in Albany is broken, I don't expect any changes.

I'm just disagreeing about NYC (and environs) dragging down the upstate economy - its just part of an overall trend - the upstate malaise is hitting a lot of other NE/Midwest manufacturing areas. Even if the tax situation changed - I wouldn't expect a lot of manufacturing to flow back - or if did, it would just be temporarily at the expense of some other region of the NE/Midwest...

Still - the lower tier economy is confusing - the Vestal corridor is booming more than ever - every time I go I am amazed at how the sprawl keeps spreading - and now I see some small office parks opening up - so its not just Walmart and Applebee's behind the expansion. But over the river, downtown just looks worse and worse...

As for IBM Federal Systems - I definitely remember. A lot of my friends went on to work for Lockheed Martin at the same office once it was taken over. In the end, I think IBM was just trying to take advantage of the local government - seeing if they could get some handouts. I suspect that the below average salary you can afford to offer in Binghamton still makes Binghamton an attractive place for a lot of businesses - certainly an advantage over Buffalo or Rochester...

Broome County Guy
January 1st, 2005, 03:50 PM
dtloman,
That's fine. This forum seems to move rather ....slow and deliberately. It goes against my better judgement to mention this, but if you want to take a minute and view a local message board that looks very much like this one, and reflects Broome County's unfiltered attitude, check out the "message board" at www.bcvoice.com. You don't have to register, so people tend to post from the hip. Your post could be on page 2 by tomorrow. Sometimes we even bad mouth New York City.

I do crazy things sometimes. Seeing as how, we are looking for a high of about 40 degrees, I took a New Year's day motorcycle ride up to Greek Peak to watch some skiing this morning. Our local ski resort is first rate for one with only a 900 foot drop. It looks like lifts 1 and 3 are open at least. Perhaps I will do some skiing tonight. Motorcycling and skiing on the same day. Don't think you can do that in the City.

Yes, in contrast with Vestal, Binghamton is in poor shape. Binghamton itself seems to be in the middle of a perfect storm of high taxes, high utilities, lost manufacturing and political corruption. Binghamton is also the urban center of the county where immigrants gravitate to, mostly for the generous benefits that are mandated by Albany. Just spoke to my county legislator. He said, if it wasn't for Albany's mandates, Broome wouldn't even have a property tax. The largest private employer now is a group of businessmen who are trying to use IBM's old facilities, in Endicott, to manufacture electro/mechanical equipment. Of course, they have Empire Zone status, so they claim they will stay as long as the tax breaks hold up.

http://www.state.ny.us/governor/press/year04/feb5_2_04.htm

Still more about IBM and New York taxes. Thought I had, maybe, gotten ahead of myself and made some remarks about them without getting my facts together....about them having a "similar, permanent deal to stay interested. Otherwise, we just aren't a competitive state." Turned out that research wasn't even necessary.

http://www.gorr.state.ny.us/gorr/10_10_00gov_ibm.htm

What a fluff piece.

"Increased Empire Zone incentives available to IBM totaling $475 million, substantially enhanced New York State's position against aggressive incentive packages from competing states and countries. In addition, IBM will benefit from $28.75 million in State grants and loans, and is eligible for $156 million in sales tax and local benefits/exemptions."

It probably won't end there.

Just proves that New York is a fine place for business if you're one of the DOW 30, with enough clout to make the state make an exception for you to keep you around. I spent part of Christmas with a retired IBM engineer who said IBM threatened to go anywhere, even just over to Connecticut before they got their tax breaks.

dtolman
January 18th, 2005, 01:06 PM
Broome County Guy,
Thanks for the link. I just got back from another few days in Binghamton - a lot of it spent in the downtown area, and the Vestal corridor. I have to say that while the tax situation isn't helping, I think the biggest cause of the decline of Binghamton and the rise of Vestal as an area of economic development is probably bad government/poor planning.

Frankly - downtown Binghamton is a dump. And thats a shame - it has some great historic buildings from the late 19/early 20th century. But now its just one department store, the arena, some government buildings, some churches, and a lot of empty buildings.

There is no reason why all those restaurants (I mean the non-chain ones) popping up west of the city couldn't be in downtown - after all, there must be a local/regional market to support them. It looks (to me at least) that the regional/county economy is doing OK - its just that none of the development is happening in Binghamton proper...

Hopefully someone in government opens their eyes, ignores the optimistic Press & Sun articles, and starts looking into how other cities successfully revitalized their downtown.

johntedder
January 26th, 2009, 11:36 AM
New Yorkers pay the highest property taxes in the nation.
Property taxes are 78% higher than the national average.

New York schools outside of New York City spend more per student
than any state in the nation – an estimated $18,768 in 2008-09.
New York’s per student spending is more than 50 percent above the national average.

The New York State Commission on Property Tax Relief recently
released their final report with recommendations on how to fix this.
It is an excellent report that is very interesting reading. You can read it here (http://www.cptr.state.ny.us/).

Take some time and read the report. Spread the word. New York needs to
start implementing these changes now.

I am surprised that there has not been more TV, radio and press coverage of this report.

Are New Yorkers so fed up with Albany that they just assume that the way it is is the way it will always be?