by Rex Sinquefield, March 22, 2013
In 2011, New York Governor Andrew Cuomo promised a major overhaul in the state’s tax code. Along with that promise he set out to empanel a tax reform commission “to address long term changes to the tax system and create economic growth.”
Instead, Governor Cuomo seems more committed to tweaking New York’s antiquated and punitive tax structure and turning a blind eye to the devastating impact those policies are having on The Empire State. Unfortunately for the taxpayers of New York, the research shows that things do not look good, even if the millionaire’s tax would expire.
According to the new numbers below which were released by the Tax Foundation and published Tuesday in Crain’s New York Business:
· New York ranks No. 3 in state and local tax burden per capita behind Connecticut and New Jersey.
· New York ranks No. 1 in state and local tax burden as a percentage of state income.
· New York ranks No. 2 in Tax Freedom Day, which is the day the average New Yorker has earned enough to pay his or her taxes. The day is May 1. The median freedom day is April 14.
· New York ranks No. 1 in individual income tax collections per capita (fiscal year 2011) and No. 1 in state and local individual income tax collections per capita (even though only the city and Yonkers levy an income tax).
And this is not a recent development.
Historical data of taxpayer records made available by the United States Internal Revenue Service and publicly available at www.howmoneywalks.comoffer a long-term look at why upstate New York deserves real tax breaks rather than more excuses. The analysis (shown below) correlates the following IRS net losses in adjusted gross income (AGI) that occurred from 1995-2010:
· The entire state of New York lost $58.6 billion in AGI, enough to build 39 Yankee Stadiums. That’s an average of $3.9 billion a year, or $10.7 million a day, over 15 years.
· The New York Metropolitan Statistical Area, which encompasses 23 counties in three states, saw $66.1 billion leave—that’s more than twice the net worth of New York Mayor Michael Bloomberg.
· The five boroughs of New York saw a loss of $43.8 billion, about the market value of Time Warner, one of the city’s commercial anchors.
If Governor Andrew Cuomo still believes, as he did when he was elected, that the answer cannot be more and more taxes levied on New Yorkers, a good place to start backing his past rhetoric would be to reduce tax burdens for business owners. Until punitive taxes on workers and employers in New York City are lowered, or at least stabilized, it’s a safe bet that more investment firms will set up shop in North Carolina, more high wage earners will to turn to tax havens such as Puerto Rico, and Florida home values will continue to rebound. In fact, according to a recent survey by the New York Enterprise Report of 100,000 entrepreneurs, 85% are in favor of tax reform.
Albany politicians may be the only people left in New York who accept the idea of raising taxes.
The data is clear, many of those who do not accept New York’s tax and spend addiction as normal, may have erased the state from their March Madness tax brackets a long time ago.