Mayor Bloomberg will seek to revive New York City’s commuter tax, his budget director told the City Council yesterday. First enacted in 1966, the tax was repealed by the state Legislature and then-Governor Pataki in 1999, over the loud objections of city officials at the time. The arguments against the tax haven’t changed much since we filed this NYFiscalWatch memo back in January 2002:
The notion that commuters are a bunch of well-paid freeloaders has long been popular in financially strapped U.S. cities. But it’s a fallacy.
Think about it for a moment: Many of the middle- and upper-echelon jobs in corporate offices, brokerage houses and law firms in lower Manhattan are held by people who live in the suburbs. If these commuters are so costly to New York, why is the city so concerned about losing them to New Jersey?
The answer, of course, is that everyone who works in New York contributes to the city treasury—directly, through sales taxes on purchases in the city, and indirectly, through a broad array of city taxes paid by the firms that employ commuters and profit from their productivity.