There are many positive reasons to live and work in New York. Unfortunately, state taxes are not one of them.
Each year, the Tax Foundation, an independent tax policy research organization based in Washington, D.C., publishes various reports ranking each state’s tax burdens. One very useful report, published in a pocket-size compendium, is entitled “Facts & Figures: How Does Your State Compare.” This report in a simple manner compares, among other things, the various tax rates among the states.
Sadly, in almost all tax categories, New York has the highest burden. For example, New York ranks first when comparing state-local tax burdens per capita and as a percentage of income. We rank second when measuring state-local corporate income tax collections per capita; third in gasoline tax rates; third in state-local cell phone tax rates and on and on.
Many in Albany shrug their shoulders when confronted with this information. The general retort is that in New York we offer a lot of services and these services have to be paid for in some manner. This is true.
According to the Tax Policy Center, in 2014 (the most recent date that they have published) New York on a per capita basis had the third highest state and local expenditures in the country.
Governor Cuomo certainly recognizes that we have to pay for the services we provide. Although he has said on many occasions that taxes are too high in New York, he is still proposing millions of dollars of new taxes and fees in his 2017 state budget.
The question then is whether having high taxes and high spending is good for New York. If one uses the economy as the measure and compares it to how it has performed relative to the rest of the country, particularly the Upstate economy that doesn’t have economic engine of Wall Street, then the answer is clearly no.
A better path for New York would be to restrain spending and lower taxes across the board. While taxes are not the only factor in business decision-making, they play a significant role especially when the state’s tax burden is higher than anywhere else in the country.
One of the most ironic outcomes of New York’s high tax culture is the development of many of the state’s economic development programs. For example, programs like Start-Up NY, which promises qualifying companies 10 years of tax free operations, is an effort to spend state money in order to provide businesses relief from the state’s undesirable business tax climate. Too often these programs have overpromised and underdelivered.
In the case of Start-Up NY, the governor and state economic development officials claimed that the program would create 4,100 jobs by 2020. After two years in existence, only 408 jobs have been created. Wouldn’t a better solution be to cut taxes for everyone?
Anyone interested in how New York compares with other states in regard to the multitude of taxes that government imposes on its citizens should visit the Tax Foundation’s website at taxfoundation.org.
During this year’s budget negotiations, I am going to continue to advocate that New York needs to change the way it operates and while it is good to be first in a lot of things, being first among states with the highest tax burden is not one of them.
If you have any questions or comments on this or any other state issue, or if you would like to be added to my mailing list or receive my newsletter, please contact my office. My office can be reached by mail at 200 N. Second St., Fulton, New York 13069, by email at [email protected] or by calling 315-598-5185.
