New York’s Non-Competitive Corporate Tax

| NY Torch

In the letters section of today’s Wall Street Journal, a Canadian takes aim at New York City’s sky-high corporate tax burden:

The effective combined U.S. federal, New York State and New York City tax rate of roughly 46% to 47% that corporations pay on their New York City profits is not only the highest, but in comparison to the lowest roughly 30% (combined Canadian federal and provincial rates) in the Canadian provinces of Alberta, British Columbia and Quebec, that rate is more than 50% greater.

[snip]

The villain in the piece is the New York City component — roughly 9% gross and effectively 6% when deductions for federal taxes are factored in. Without that, the city rate would be roughly 40% to 41% — still higher than the 34% in neighboring and contiguous Ontario but clearly competitive with California and other major U.S. states.

This New York City comparative disadvantage will only grow vis-à-vis Canada as it phases in a further 5% reduction in the Canadian federal corporate tax rate by 2012.

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