Your Feb. 28 editorial on the impact of California’s celebrity-backed tax hikes (“Meathead Economics”) certainly struck a chord with anyone monitoring the trends here in the Empire State.
New York, like California, has been hemorrhaging native-born residents for years; what’s more, New York was one of only three states to sustain a net loss of population between 2004 and 2005. Our business tax climate was just ranked the worst in the country (again) by the Tax Foundation. The New York state and city budgets are both more dependent than ever on tax receipts generated by a relative handful of millionaire households, even as teachers’ unions and their allies advocate more soak-the-rich tax schemes seemingly calculated to boost real estate values in Florida. And to think we did it all without the help of Rob Reiner!
Yet, when it comes to marginal personal income tax rates, it should be pointed out that even New York is not quite as bad as California. Thanks in large part to growth-inducing effects of the Bush tax cuts, which helped ignite a surge of investment-related tax receipts, New York’s “temporary” added rate brackets on high-income households were allowed to expire on schedule at the end of 2005. There is no serious move afoot in Albany to extend them this year; indeed, Gov. George Pataki’s swan-song budget seeks added cuts in both personal and business taxes.
As of 2006, the combined New York State and New York City marginal income tax rate has reverted to its “permanent” (still lamentable) level of 10.5% — a full 1.5 percentage points behind California. By this measure, at least, Archie Bunker’s Queens is only runner-up to Meathead’s Beverly Hills.