The Brian Sullivan Blog
  • March 31, 2009 01:28 PM EDT by Brian Sullivan

    Is New York City An Example Of Tax Hikes To Come?

    Following up on my entry yesterday about taxes...

    There is an interesting graphic in today's NY Post on how everyone in New York is gonna get socked in taxes.   Costs are going up for everyone, not just the wealthy.

    As the graphic indicates, even just a 1% increase in taxes will cost the family an extra $4,000 per year.  Combine that with the 4.6% jump on the federal side coming in two years and the numbers start to get even larger.

    The current tax rate on income is 33% between $200,000-$357,000 and a top rate of 35% on anything over $357,000.   Obama wants to raise the 33% back to 36% and the top end back to 39.6%.

    Looking at the family example below and using those tax increases show some big numbers:

    Taxable Income: $450,000

    Current federal (not including state) income tax payment: $125,000

    Additional payments Federal post tax increase: $7,600

    Total federal income tax payment: $132,600

    Yes, the numbers are rough because every household has a different situation with deductions, etc.   But you get the point.   That, my friends, is a lot of money.   And consider it doesn't even include state taxes, New York city taxes, social security, medicare or other payments.    What's worse is that the family itself will see little benefits from the federal tax increase as more and more of the money will go to merely paying down interest on the national debt.

    news_graph1

    It's even worse than this.   The stories the Post didn't add are the impact of other increases, such as the mortgage interest deduction reduction, possible cap-and-trade led increase in the price of everyday goods, higher "sin" taxes (I saw a sign advertising a "special deal" on Marlboros in NYC for "only" $10.05 a pack the other day) and higher property taxes for those in the 'burbs.

    Though few overall will care about this increase (save for the couple % who pay this much in taxes), the city overall should care as the bottom will continue to drop out of the real estate market as these families look to pack up and leave the city.

    Perhaps instead of debating the benefits of raising taxes on the wealthy to pay down deficits we should be asking why we have such big bills to pay in the first place.

Robert Clay

I think that all goverment works schould all take a 50% pay cut just like the rest of us they are all over paid, and underqulified. All public sector workes need to take a substantial Pay cut it's better than being unemployed, Besides they are all overpaid no one is worth more than we pay the president of the United States and schould not be allowed to make more.

March 31, 2009 at 3:35 pm

6ftrabbit

You know, when folks think about dictatorship they usually associate the term with some 3rd world military junta that enforces the rules at the point of a gun. What we are faced with is not a Military/Political dictatorship, but rather a "Economic/Political" dictatorship where the rules are enforced via taxes, credit scores, salaries, etc.. It is extraordinarily difficult to fight such a strategy, since it enlists the legislative and legal systems on behalf of the gov't; and therefore opposition to it is automatically subject to prosecution (and persecution) without adequate countermeasures.

March 31, 2009 at 7:44 pm

Don Kamp

"The best Repubican is a Democrat who just got his tax bill." --Unknown quote. I got to get out of this state. There are too many spend crazy liberals! Don Kamp Canajoharie, NY

March 31, 2009 at 10:56 pm

Cindy

The last thing we need in this economy is higher taxes. It will only make things worse all around. My daughter works her tail off at a popular restaurant here in Southern Calif. Tonight she told me a couple with a child came in, ordered alcohol, an appetizer and three dinners. While she was processing their bill, they casually walked out without paying. It's happening more and more. Then, this afternoon, someone stole bags of aluminum cans from the side yard of a friend's house. What's my point? People are desperate to the point of stealing. What angers my daughter so much is that she has to pay taxes on that $75 meal those people skipped out on. The govt also taxes her on "assumed" tips even when she gets stiffed. Higher taxes, whether they be on the rich or poor, is not the answer. When will they get it?!

April 1, 2009 at 2:48 am

Jon Dean

What is the author smoking? These are horrible examples! "The average Joe" according to the US Census bureau make $48,000/year, not $95,000! And why would he be drinking 72 bottles of wine every year? Is he an alcoholic? The "well-off family" makes $450,000! Wouldnt someone making DOUBLE the national average be considered well off? The "Average Joe" example is well off. THe picture of the single guy making $110,000 looks like a lot of guys I know, and they make around $20,000. It seems the author has lost touch with reality.

April 1, 2009 at 11:17 am

Keith

Most strong ompanies have regular assessments on internal spending and process improvement. Do we hear about these things in governnent? Would it be worth every state government hiring a 100K/yr employee just to focus on identifying these needs? We look at companies with $100B in revenues and $110B in costs - they're going to focus on cutting costs, not increasing prices! What should make our governments any different? Heck, with as long as our governments have been growing, I can't really imagine the possible gains that could be seen by such efforts.

April 1, 2009 at 3:44 pm

Jonathan Miller

I am kind of confused by the article. After reading the comments, does the article only apply to those living in Manhattan? If the average house payment was 9400, wouldn't the owner have to make $40k/month or $480k per year to meet the 25% of income recommendation? I am missing the link between the average income affording that place. Are there no places in the suburbs that are cheaper? I do have to agree with Jon on the alcoholic thing, for the 30-year-old-guy. I used to drink about 2 12packs a week, sometimes 3 and I was an alcoholic. The last thing I would have been worried about was an extra 3 pennies per week. And I know young ambitious 25-20 year olds who make $100k. I call them doctors and lawyers. Not the Applebee cook looking guy. 2 Questions: Does New York not have clean tap water? Does everyone drink bottled water? What is a "black car ride"? Is that referring to a funeral?

April 1, 2009 at 9:47 pm

about this blog

  • Brian Sullivan joined FOX Business Network (FBN) in April 2008 as an anchor. He co-anchors the 10am-12pm ET hours of the FOX Business block. Prior to joining FBN, Sullivan served as an anchor for Bloomberg Television where he hosted the programs Morning Call and In Focus.

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