The New York State Millionaires Tax - an onerous burden? Not so much...
All joking aside let's look at New York State taxes and the hue and cry and endless wailing over the "millionaires tax." The tax rates for a couple filing jointly cap at 6.85% at $40,000. That means that someone earning over a $1 million is taxed at the same rate as some working stiff earning $40,000. In 2009 there was a temporary "millionaires" tax. The tax kicks in with couples filing jointly at $300,000. Its hikes the marginal rate (the rate goes up only for income earned above the $300,000 cut off) 1% to 7.85. Then it hikes the tax again for at the $500,000 level (another 1.12%).
This tax is set to sunset because we can't' upset the job creators! The only glitch is that it leaves the state short an additional $4.6 billion for the fiscal year 2012. But let's not be trivial - at least the "productive citizens" and "job creators" won't leave New York.
Let the screaming begin….
One would think that we were asking these people to cough up the national debt personally. There were cries that the "job creators" would move out of state. We would "lose" this critical mass of humanity that gives us oh so much. They would never stand for it - and it was totally unfair.
But let's look at this objectively. A family making $350,000 a year is being asked to cough up a monumental $500 more per year. That's $41.67 a month. Does anyone seriously see someone selling their home at a 25% loss over a few years ago to save $41.67 a month?
What about families earning $500,000? They pay $2000 more in taxes per year. The monthly outlay for that is $166.67 a month - or a nice dinner out. More substantial - but I hardly see people picking up stakes and moving out of state. But to put this in proper proportion you need to reframe the question…
Would you spend $16.67 a month in taxes to prevent the state of New York from going bankrupt?
That's really the heart of the issue. Taking things in their proper proportions is something that has not been done in the news media. That $2000 a year is the equivalent of asking a filer who earns $50,000 to cough up $16.67 a month. When taken in this context - this is hardly an onerous request or a massive burden. And certainly, few $50,000/year earners would move out of state over such a tax.
A Progressive tax is not a dirty word….
Yes, the tax is progressive - as well it should be. New York State has perhaps the largest percentage of millionaires of any state in the nation. These millionaires demand services that raise the cost of living for us all. Further, the hedge fund and banker types were the very people who created the economic mess that the rest of us ended up paying for. Hiking their taxes 1-2.12% to offset $4.6 billion in shortfall is quite literally the least these people can do. There is some poetic justice in the scenario. But without the millionaire's tax…New York State taxes are as regressive as it gets.
The Misinformation Mill...
There is so much deliberate misinformation regarding the nature of progressive taxation, the nature of how tax deductions are handled and how taxes prevent hiring. Most of this is on the federal level not the state…but the effect is the same. People who work as employees do not understand how the "job creators" deduct expenses and the cost of doing business off their taxes.
John Stewart takes the misinformation mania on in the segment below.
Broadening the Base?
What is the republican solution….? They have resorted to the lowest form of tyranny imaginable. Taxing the poor. Broadening the base is a wonderful euphemism for taxing the poor and middle class. Now there's a great solution. This ranks up there with kicking people when they are already down. Listen to Stephen Colbert on this one.
| The Colbert Report | Mon - Thurs 11:30pm / 10:30c | |||
| The Word - Death and Taxes | ||||
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© 2011 - Ruthmarie G. Hicks - http://www.therobberbaroneconomy.com - All rights reserved.
If they took half of everything the bottom 50% owned it would simply be 700 Billion dollars, exactly the same as the Bush Tax Cuts. These people are simply evil.
ReplyDeleteHi Motivated - Broadening the base is just ridiculous - even more ridiculous is the notion that wealthy New Yorkers will move to NJ or CT over a 1-2% tax on the top marginal rate.
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