Report: Middle Class Pays Higher Share of Income To Taxes
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- November
- 18
The union-backed Fiscal Policy Institute is promoting a national study today that claims the middle class in New York pays a slightly higher share of their income in state and local taxes than the rich.
But the report by The Institute on Taxation and Economic Policy, titled “Who Pays? A Distributional Analysis of the Tax Systems in All 50 States,” found that New York was among four states – along with Delaware, Washington D.C. and Vermont—that has the least regressive tax system.
The report explains that New York and the District of Columbia have a “close-to-flat tax system overall” because it has an Earned Income Tax Credit and an income tax with “relatively high top rates.”
It notes that ten states – Washington, Florida, South Dakota, Tennessee, Texas, Illinois, Arizona,
Nevada, Pennsylvania, and Alabama – have the most regressive taxes.
Unions pushed New York earlier this year to raise income taxes on people who make more than $250,000 a year as a way to generate—what lawmakers estimated at the time—was $4 billion in new revenue for the state. But with the recession and people leaving New York, the revenue has been much lower.
Here’s the Fiscal Policy Institute’s take on New York’s standing in the report, from their press release:
– New York families earning less than $16,000 – the poorest fifth of New York non-elderly taxpayers – pay 9.6 percent of their income in New York state and local taxes. – Middle-income New York taxpayers – those earning between $33,000 and $56,000 – pay 12.0 percent of their income in New York state and local taxes. – But the richest New York taxpayers – with average incomes of $3,065,800 – pay only 9.4 percent of their income in New York state and local taxes.
This entry was posted
on Wednesday, November 18th, 2009 at 11:51 am by Joseph Spector.
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Jay Gallagher has covered Albany for Gannett News Service since 1984 and has been Albany Bureau chief since 1989. He`s a native of the Boston area and likes to point out that in this millennium, the score is Red Sox 1 championship, the Yankees 0. 
Cara Matthews has been a statehouse correspondent in the Albany Bureau since August 2005. Prior to that, she covered Putnam County government and politics at The Journal News for nearly five years. Before that, she worked at newspapers in Connecticut and covered the state Legislature for one of them. 
Does not surprise me. Legislative agendas are always molded with “money” whispering nearby. The middle class has no one to fight for them and cannot afford the time or money to fight for themselves. While middle class includes most unions, not all belong to a union.
The threats by the wealthy of leaving New York if tax rates were higher is all bark. New York now is considered a heavily taxed state, yet many are buying up land in the state with intentions of setting up shop. Why? Because they know a dollar spent in Albany will reap benefits later on.