Let’s explain why Governor Kathy Hochul (D.) should not be sending New Yorkers $500 checks in fewer than 500 words.
The governor announced an “inflation refund” of $300 for single filers and $500 for joint filers, subject to very generous income limits so most residents will receive the checks. She says this money is coming from “excess sales tax revenue” due to inflation.
Right off the bat, government’s sending people money is a way to cause inflation, not to cure it. But this is really an ordinary tax rebate dressed up as a response to inflation.
New Yorkers are overtaxed. Inflation does increase sales tax revenue, something most states experienced in the past few years, and New York especially should be using this extra revenue as an opportunity to reform rather than giving it away as a one-time benefit.
New York’s top marginal income tax rate of 10.9 percent is second-highest in the country, only trailing California’s. New York’s income tax has nine brackets, contrary to the national trend for flatter, simpler state income taxes. Come January 1, 14 states will have a flat tax, eight states will have no income tax at all, and two more are in the process of phasing theirs out.
New York’s top corporate tax rate is 7.25 percent, which, combined with the federal rate of 21 percent, means major New York businesses pay a higher corporate tax rate than they would in most other countries around the world, including communist China. Six states have no corporate income tax at all, and most don’t rely on it as a significant source of revenue.
New York property tax collections per capita (that’s per person for the entire population, so per homeowner would be much higher) are $3,359, the second-highest of any state, trailing only New Jersey. Property tax collections equal 1.54 percent of owner-occupied housing value in the state, the sixth-highest rate in the country.
The State of New York takes, on average, $11,809 from every man, woman, and child within its borders. The State of Florida’s revenue per capita is $5,731. And as much as New York likes to complain about “subsidizing red states,” federal aid makes up a larger share of New York’s revenue (41.9 percent) than Florida’s (37.5 percent).
Despite all these taxes, New York’s debt per capita is the third-highest of any state, trailing only its fellow tax-happy neighbors, Connecticut and Massachusetts.
If Hochul cares so much about returning money to taxpayers, she should be asking the legislature to stop taking so much of it in the first place. Instead, she’ll send residents a check this one time, the year before an election, and after that, they’ll be expected to keep paying up.
At just over 450 words, we’ve come in under budget — something New York should try for a change.