New Yorkers Carry Largest US State And Local Tax Burden

by Leroy Baker, Tax-News.com, New York

05 June 2006

Taxpayers in the state of New York shoulder the heaviest local and state tax burden in the country, according to a business group.

The Public Policy Institute of The Business Council of New York State has revealed that New York's combined local and state tax burden was 53% above the national average.

The study, based on 2004 census data, concluded that New York state had collected $5,260 per person per year, up from $4,684 in 2002. This is more than double the amount collected by the state with the lowest local and state tax burden, Alabama, which received $2,328 per person.

In 2004, New York collected more than $100 billion in taxes for the first time and was surpassed in this respect only by California, which received a total of $133.9 billion. However, with a population of 36.1 million (compared to New York's 19.2 million), California's tax burden per head is substantially less - $1,524 lower than in New York.

Even New York state's Commissioner of Taxation and Finance, Andrew Eristoff, has acknowledged that the state's taxes are "ridiculously complicated" and rates "ridiculously high".

Speaking at the Business Council's annual Conference on State Taxation last month, Eristoff warned that New York's corporate tax is a "Potemkin village" of high rates and complicated exemptions, and suggested that "the rational thing to do is to get rid of it."

"At $2.1 billion, today's Article 9-A tax contributes just 5 percent of our state revenue, yet it generates a disproportionate amount of tax-related heat and light," Eristoff noted.

"And its administration consumes a vast amount of public and private resources," he added.

Eristoff also accused legislators of creating further confusion in the tax system with tax incentives such as the Empire Zones, created in an attempt to make the tax burden appear "more reasonable".

"A 'targeted tax cut' is really a politician's code phrase for delivering specified benefits to a defined constituency that can and will be appropriately grateful," he remarked.

A better approach would be to emphasize simplicity, lower rates, economic neutrality, and accountability, Eristoff said.

Recommended