New Yorkers, You Can Do Something About Those Brutally High Taxes
You might want to consider voting for a candidate with a flat tax
Feeling down in the dumps today? If you live or work in New York, you are not alone.
“The day after filing their taxes, April 19, New Yorkers go to the polls... The experience may make them appreciate Republican Sen. Ted Cruz’s tax plan. His 10% flat tax is lower and simpler than those of other candidates.”
Taxes are due April 18, and New Yorkers are paying far more in state and local taxes than most Americans: 12.7%. New York state residents have the seventh-highest federal tax burden in the country, at $10,500 per person.
The day after filing their taxes, April 19, New Yorkers go to the polls to select their parties’ presidential candidates. The experience may make them appreciate Republican Sen. Ted Cruz’s tax plan. His 10% flat tax is lower and simpler than those of other candidates.
Donald Trump, another Republican, has three tax brackets with a top rate of 25%, retaining many itemized deductions. The two Democratic candidates, Hillary Clinton and Sen. Bernie Sanders, raise the top rate to 44% and 52%, respectively, and increase the number of brackets without removing deductions.
The Cruz plan would encourage states to decrease their taxes by removing the deductibility of state taxes from federal income. (Disclosure: My husband, Harold Furchtgott-Roth, is an unpaid economic adviser to Ted Cruz.)
States have more freedom to raise their income taxes because they are deductible from income before federal tax is paid. That way, the federal government subsidizes the high tax rates in states such as New York and California by giving their residents a lower federal tax payment. That partly makes up for the high tax. If that tax break were removed, people would complain more, and states would not be so free to raise their taxes.
Some might say it’s only fair that New Yorkers pay higher taxes — after all, aren’t incomes in New York higher than in other states? But New York City is also a particularly expensive place to live — it costs 22% more than in an average U.S. city — so higher incomes are at least partly absorbed by higher living expenses.
It’s not just expensive to live in New York, it’s also an expensive place to die...
Read the entire piece here at WSJ's MarketWatch
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Photo by Eduardo Munoz Alvarez / Getty
This piece originally appeared in WSJ's MarketWatch