As you may recall Monday was New York State’s Tax Freedom Day. What does that mean? It means New York residents finally earned enough money to pay off their tax bills for the year. That’s a good thing. What’s not so good? That most other states reached Tax Freedom Day by April 18. New York wasn’t last (thank goodness for Connecticut who doesn’t reach its Tax Freedom Day until Monday) but it was pretty close. So why are we so far behind?
The answer is pretty simple. Let’s start with the basics:
- New York State already has the second highest gas tax rate in the country (again only beat out by Connecticut)
- New York has the highest per capita income tax
- and the worst business tax climate in the country.
So, obviously our taxes are a bit out of control compared to other states. The 2% tax cap at least is helping us improve where property taxes are concerned (but we were in the top 5 less than three years ago).
There are also a number of areas where New York is particularly unique. Let’s take the 18-a surcharge for example. This extra charge on the energy used across the state is not going to help us when we already have the third highest energy costs in the nation. This is not the only surcharge on already over taxed New Yorkers. The HCRA (Health Care Reform Act) surcharge, an extra charge for patient care provided by state licensed providers, is on top of $53 billion spent annually to provide Medicaid coverage in New York.
This week Chief Executive Magazine released its annual rankings of the best and worst states to do business in. New York came in second to last (only California, rather than Connecticut, ranked lower). Our tax rates and surcharges hurt our future not only by driving fed up residents away, but by keeping businesses and economic opportunities out. There’s no reason for New York to lag so far behind the rest of the United States when it comes to taxes. Other states are just as successful, if not more so, without bankrupting residents. These rankings should be wake up calls. There are fixes available, Albany just has to address them.