New York State has the greatest income inequality than in any of the other fifty states. The wealthiest 1% of taxpayers in New York State are taking home the lion’s share of income gains, but they pay a smaller share of their income in combined state and local taxes than lower and middle-income families. New York households with incomes under $100,000 pay higher effective and local tax rates, ranging from 10.4% to 12%, than the richest 1% of households, who pay 8.1%.
Due to the regressive sales and local property taxes, most low- and middle-income families pay a greater percentage of income in sales and property taxes than in income taxes. This disparity in the tax structure has contributed to income inequality.
The Fiscal Policy Institute has proposed a 1% Plan for Tax Fairness, permanently extending and enhancing the Millionaires’ Tax. The new structure will raise income tax revenues by approximately $6.2 billion, about $2.5 billion more than a similar extension proposed by the Assembly. Half of the taxpayers affected by the tax are non-residents, mainly stemming from incomes earned in New York City’s finance and other highly-compensated businesses. However, 97 percent of New York residents subject to the tax reside downstate in New York City, Long Island, Westchester, Orange and Rockland counties while three percent hail from upstate.
2. Contact your Assembly-member and State Senator. Calls and handwritten letters are very effective, try to meet with them when they are in their districts. Share with them the following:
• The average income of NY’s richest 1% of tax filers was $2 million in 2014, compared to $47,300 for the remaining 99%.
• The average 1% income was nearly 43 times the average income of the bottom 99%.
• New York families headed by a person of color were 1 and 1/2 times more likely than families headed by a white person to have very low incomes.
• Roughly 2/3 of black and Latino families were in the bottom 1/2 of the income distribution (64% of black families and 71% of Latino families.
Encourage them that the best response to the regressivity of New York’s overall state and local tax system is to make the personal income tax more progressive. To do that, New York should build on the current tax structure originally proposed by Governor Cuomo in December 2011, set to expire at the end of 2017.
3. Share this information with your contacts and on your social networks.