Tax Freedom day gets pushed back again.
May 03, 2013 09:40:29AM MDT
N.Y.’s Tax Freedom Day comes later than most
Written by Cara Matthews
Tax Freedom Day, which marks when taxpayers have earned enough to pay federal, state and local taxes for the year, was April 18 nationally but won’t arrive until Monday in New York, the second-to-last state.
New York is behind only Connecticut, whose residents will pay off their tax bills May 13, said the Tax Foundation, a Washington-based nonpartisan tax research organization.
New York is so late partly because it is a high-wealth state, and taxpayers contribute more in federal income and payroll taxes, said Elizabeth Malm, an economist with the Tax Foundation. Mississippi and Louisiana were the earliest states to celebrate Tax Freedom Day, on March 29.
“If the state has a higher-than-average income, then that means it’s going to pay more,” she said.The second reason is New York has a high state and local tax burden, Malm said. New York routinely is at or near the top of the list of states when it comes to these measures.
An October report from the group said New York had the highest state and local tax burden compared with the U.S. average in 2010 at 12.8 percent. State and local taxes per capita were $6,375 that year. Alaska ranked 50th, with $3,214 in per-capita state and local taxes.
“It’s a sad commentary on New York state politics that we are the second worst in terms of the amount of time we have to work for the governmental institutions,” said James McCauley of Chappaqua, executive board member of BEST4NY — Better Education and Smarter Taxation for New York.
The group wants more local control over school and municipal budgets, which members think can be achieved by reducing programs and services the state mandates and requires local governments to pay for.
Last year, Tax Freedom Day was May 1 for New York and New Jersey. New Jersey’s is Saturday this year. Nationally, Tax Freedom Day was five days later than last year, mainly because of the fiscal cliff deal, which increased federal taxes on individual income and payroll, the Tax Foundation said. Another reason is the Affordable Care Act’s tax on investment income for higher-income individuals took effect.
Americans will pay $2.76 trillion in federal taxes in 2013 and $1.45 trillion in state taxes, which add up to about 29.4 percent of income. They will spend more in taxes this year than on food, clothing and housing combined, the Tax Foundation said. Property taxes in the Lower Hudson Valley are among the nation’s highest. Westchester was the first county in the United States to reach a median property-tax bill of $10,000, up 12.5 percent from 2008, according to estimates released last fall from the U.S. Census Bureau’s American Community Survey. Rockland’s median bill was third in the nation, rising from $8,430 to $9,376 during that time. Putnam ranked 12th in the country at $7,851, up from $7,324 in 2008.
Steve Lonegan, an Americans for Prosperity spokesman, was in New Jersey Thursday to help mark that state’s Tax
Freedom Day. Americans for Prosperity advocates for limited government and free markets on the federal, state and local levels.
“It’s pretty sad to watch these two states, which used to be economic powerhouses for the whole country, falling behind because of failed government policies,” he said of New York and New Jersey.
The Tax Foundation ranked New York in last place in the 2013 fiscal year for its state business tax climate.The largest tax that most businesses pay is the property tax, said Ken Pokalsky of the BusinessCouncil of New York State. The state put a 2 percent cap on the property-tax levy but that only limits future growth. Reducing state-mandated programs and services would help, he said.