Tax Relief for Middle Class and Working New Yorkers

At a time when New York City's middle class and working families are working harder than ever to make ends meet -- but falling farther behind -- there is no justification for a city income tax code that penalizes them so unfairly. Right now, a school teacher making $50,000 a year is in the same tax bracket as a CEO earning $500,000 a year.

How do we look a beat cop in the eye and tell him he's paying the same local tax rate as a $500 an hour lawyer?

We can't and we shouldn't. It's time to reform New York City's deeply inequitable income tax code.

As I travel through the neighborhoods of this city, I hear a similar message from New Yorkers:
It's harder than ever to live here and raise a family, they tell me, because the cost of everything is going up. We've always wanted to believe that by working hard, you can still get ahead in this city. But we don't know if we can believe that anymore.

I hear these concerns -- and they can't be ignored.

Just a few months ago, Gov. Cuomo restored some sanity to the state's income tax system. He knew something was wrong when millionaires were about to pay the same rate as families at the bottom of the ladder. So he created three new income brackets at the state level and cut taxes on families making less than $300,000 a year.

Today, I am proposing that the city do the same.

We need to overhaul our city income tax code to make it more graduated and progressive. And we need to give a little back to middle class families, who over the last 10 years have seen the price of everything go up -- and not just big-ticket items like housing, healthcare and college tuition.
 
Compare today to the year 2000: A 30-day MetroCard is up 65%.  Water and sewer rates have surged 144%. Heating oil has spiked 200%, and a gallon of gas is nearly triple the price. Meanwhile, salaries and benefits have simply not kept pace.
 
My plan, reviewed by the Independent Budget Office (IBO) and scored revenue neutral, would give a little back to working people by creating three new tax brackets. It would reduce taxes for families making less than $300,000 and individuals making less than $200,000, in line with Gov. Cuomo's plan. Families earning between $300,000 and $1 million (and individuals with incomes between $200,000 and $1 million) would not pay another penny in taxes.
 
Under this proposal, the only people who would see a tax increase are those making $1 million a more per year, but even the highest earners would see rates rise less than 0.5%. If we do this, 95% percent of New Yorkers would see a tax cut, with the bulk of the savings going to those who need it the most.
 
As it stands, New York City is home to the steepest income inequality in the nation. Today, the top 20 percent of income earners in Manhattan make nearly 38 times as much as the bottom 20 percent -- the greatest differential in the country.

We should reward success in New York City. But it is time for the very highest earners to pay their fair share, and to create a tax system that gives a little back to middle class New Yorkers. A well-balanced plan like this could return more than $300 per year to middle class and working families -- not enough to make New York truly affordable, for sure, but a good place to start.
 
State Sen. Adriano Espaillat and Assemblymember Robert Rodriguez are already drafting legislation to move this plan forward in Albany, because what's good for the state should be good for the city.

We should create a City income tax system that restores basic fairness. A City built on the middle class deserves a government that stands up for middle class New Yorkers.

 

Comments

[jasybella]

08:49 AM on 02/14/2012

great post. If you sign a rate, you may be eligible for tax relief. thanks for this informative article.

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[corwin]

03:42 PM on 02/05/2012

But,..but won't the Smart People just leave? Then ,what happens?

[dolfninnyc]

05:30 PM on 02/04/2012

1//2 this city's workers pay no tax at all - make everyone pay at least $10 (a year!) and you'd have a "fair" tax and plenty of dough in the city coffers to waste on freeloaders.

[NYCKitty]

09:17 AM on 02/03/2012

My husband (a city worker) and I make a lower 6 figure salary. Try to afford a house in a decent area of NYC - homes in my Bronx neighborhood are going for $450k and up. Add in property taxes of over $3k a year yet those living in million dollar apts. are getting tax abatements. And let's not forget education - if we had children they would HAVE to go to Catholic school, which is another $3k a year for grammar school and right now $6k+ for high school (and in 15 years that cost will probably double).

The middle class of NYC have been ignored for years. Face it, we make this city run. We're putting out the fires, patrolling the streets, getting everyone to work, picking up the garbage, teaching the kids, securing the buildings, sweeping the sidewalks - yet we can't afford to LIVE here! There is something very wrong when middle class NYers, especially those that have been here a few generations as I have, can't afford it anymore.

Example..we saw a house in Northern Westchester. Asking price $275k (could probably get them down to $250k). Taxes a little over $5k but add in STAR and they drop to about $4k. Metro North down the street. Budget in our savings from not paying NYC taxes anymore and the drop in car insurance (hello-$50 a month!) and we would MAKE MONEY living there. Only problem was my other half didn't want to make the commute.