Monday, April 13, 2009

Tax Day in Manhattan - 2009

Two days from today, it will be Tax Day in Manhattan as well as in all of the other 3,141 counties in the United States. This is an excellent time to look carefully at the level of taxation we face here in what is truly the capital of the world.

Tax Burden Falls Heavy on Manhattan

As taxpayers across our country prepare for the deadline for filing their tax returns, we look at the tax burden of our county, New York County, which is synonymous with the borough of Manhattan and find that Manhattan residents have a greater tax burden than residents of any other county in the United States.

Manhattan's highest-in-the-country tax burden is 20% of income, more than one-half of one percent higher than the next closest county, which is Fairfield County, a Connecticut county in the New York City area and the home of General Electric. Westchester County, the county immediately to the north of New York City's Bronx county, ranks as the fourth most burdened county in terms of taxes with a burden of 18% of income. Elsewhere in the top ten are two New Jersey counties in the New York City area. Those counties are Somerset and Morris counties.

Of the most taxed Congressional districts, three of the top five are in Manhattan, and the most taxed Congressional district in the country is the Manhattan district represented by Carolyn Maloney.

Manhattan's tax burden will likely increase in the near future as income tax increases are a part of the plan for future federal budgets and are already included in the New York State budget for next year. As we have stated previously, increasing taxes in New York State is a necessary evil, while the increase in federal taxes would be a mistake representing a poor understanding of macroeconomics. Because the New York State budget must always be balanced, revenue increases or budget cuts (or both) are necessary during economic downturns. The federal budget should run into deficit spending during economic downturns to spur economic growth. Unfortunately, our national leadership in Washington, DC is now planning to raise taxes despite the economic challenges facing our country, and those tax increases (particularly when coupled with the New York State tax increases already adopted by the New York State legislature) will increase the gap in tax burden between Manhattan and the rest of the counties in the United States.

New York State Also Leading the Country in Tax Burden

For nearly every year of the last 30+ years, New York State has been the most taxed state in the United States. From 2006 to the present, New York has been the second most taxed state in the country (New Jersey replaced New York as the most taxed state in 2006).

Therefore, Manhattan residents live in the most taxed county in the country and are surrounded by other counties with high tax burdens in a state that ranks second only to its neighboring state as the most taxed state in the United States.

Manhattan's Voice Is Needed

As we stated in the aftermath of the election of President Barack Obama, Manhattan led the way in the financing of the successful Obama campaign.

It is important that Manhattan, which has the greatest tax burden and played the greatest role in the election of the current President, have a strong voice in national policy. The leadership of our country has been on the attack against Manhattan for many weeks, and Manhattan must fight back. Our place as the capital of the world should give us the confidence to fight back. Our position as the most tax-burdened county gives us ample moral authority to demand that we be heard.

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