BLOG ARCHIVESBLOG ARCHIVES
VIEW OUR APPSVIEW OUR APPS

New York has the Highest Tax Burden in the Nation for 2015

Apr 07, 2017


In Fiscal Year (FY) 2015, New York collected $171 billion in state and local taxes. While this is an impressive sum of money, it tells us little about whether or not the average New York taxpayer can afford this level of taxation.




Click here to view tax burden data by state, type of tax, and for years 1950 to 2015.

 

As shown in Chart 1, New York’s state and local tax burden (tax collections divided by private sector personal income) was the highest in the nation for FY 2015 at 21.4 percent—or 48 percent above the national average of 14.4 percent.


Chart 1 New York State and Local Tax Burden FY 2015.jpg


#NewYork #taxburden, FY 2015, was highest in the nation at 21.4%—48% above national average (click to tweet)


New York’s high state and local tax burden is driven by the fact that they have every tax imaginable and at very high tax rates. For instance, at the state level New York has the highest cigarette excise tax in the country ($4.35 per pack) and the eight highest top individual income tax rate in the country (8.82 percent). The income tax rate, however, is misleading because New York has an awful recapture provision which eliminates the tax benefits of lower marginal tax rates for high income taxpayers.


As bad as the state level taxes are, it gets much worse when local taxes are factored in, especially in New York City:



  • New York City levies an additional 4.5 percent sales tax, plus the Metropolitan Commuter Transportation District Surcharge of 0.375 percent, bringing the total state and local tax to 8.875 percent.  If New York City were a state that would be the highest sales tax rate in the country.

  • New York City levies an additional 3.876 percent on the highest earners under the individual income tax bringing the total state and local tax to 12.696 percent. If New York City were a state that would be the second highest individual income tax rate in the country—behind California’s 13.3 percent tax rate.


  • Adding insult to injury, New York City also levies a unique 4 percent tax on partnerships and proprietorships known as the Unincorporated Business Tax.

 

More troubling, as shown in Chart 2, New York’s tax burden has grown over time by a whopping 129 percent to 21.4 percent in FY 2015 from 9.3 percent in FY 1950.


Chart 2 New York Tax Burden by Type of Tax FY 1950 to 2015.jpg

 

#NewYork #taxburden has grown 129 percent between FY 1950 to 2015 to 21.4% from 9.3% (click to tweet)


New York’s high cigarette tax rate is also a great example showing that “taxes matter.” As a consequence of the combined state and local cigarette tax, New York has become a haven for cigarette smuggling. A recent study on cigarette smuggling by the Mackinac Center and the Tax Foundation measures this negative economic impact and concludes:


“In 2015, New York State had the highest inbound smuggling rate at 57 percent. In other words, more than half of all the cigarettes consumed there were not properly taxed. Directly following New York is Arizona, Washington state (up from fourth place last year) New Mexico and Minnesota.”

 

“Many other states found themselves exporting cigarettes to their higher taxed neighbors. New Hampshire was the top export state, with 72 percent of the cigarettes sold there eventually wound up smuggled into other states. New Hampshire was followed by Idaho, Virginia, Delaware and West Virginia.”

 

 

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2015.

 

Ironically, New York has significant capacity in oil and gas resources which, in other states, has been a path to tax riches. Alas, New York decided in 2010 to ban the new process of hydraulic fracturing into the oil and gas rich Marcellus Shale in the southern portion of the state. The economic and tax boom that would result in such drilling could be the answer to lowering New York’s nosebleed tax rates.


To put New York’s tax burden into perspective, let’s compare it to the earning paid out by major industries in the state (earnings is the sum of wages and salaries, supplements to wages and salaries, and nonfarm proprietors' income).


As shown in Chart 3, New York’s 21.4 percent tax burden is the equivalent to these combined industries: information, manufacturing, construction, utilities, real estate, and management.


Chart 3 New York State and Local Tax Burden vs. Industry FY 2015.jpg


#NY #taxburden = information, manufacturing, construction, utilities, real estate, management (click to tweet)

 

Of course, as shown in Chart 4, the tax burdens for local government can vary just as much as they do among the 50 states. As such, we have also calculated the local government tax burden for every county in New York—this includes every taxing jurisdiction within the geographic county borders whether it is a city, a special district, or county government itself.




The New York counties with the top 10 highest local government tax burden include:

 

  • Hamilton County, NY (41.9 percent)
  • Sullivan County, NY (20 percent)
  • Essex County, NY (18.9 percent)
  • Delaware County, NY (17.9 percent)
  • Franklin County, NY (17.5 percent)
  • Greene County, NY (16.1 percent)
  • Allegany County, NY (15.6 percent)
  • Schoharie County, NY (15.4 percent)
  • Ulster County, NY (15.4 percent)
  • Cattaraugus County, NY (15.4 percent)

 

The New York counties with the top 10 lowest local government tax burden include:

 

  • Saratoga County, NY (6.2 percent)
  • Westchester County, NY (7.8 percent)
  • Tioga County, NY (8.7 percent)
  • Madison County, NY (8.8 percent)
  • Monroe County, NY (8.9 percent)
  • Lewis County, NY (9.3 percent)
  • Schenectady County, NY (9.3 percent)
  • Erie County, NY (9.5 percent)
  • Rensselaer County, NY (9.5 percent)
  • Tompkins County, NY (9.6 percent)


Chart 4 New York Local Tax Burden by County FY 2015.jpg


Note: New York County (Manhattan) includes Bronx County (The Bronx), Kings County (Brooklyn), Richmond County (Staten Island), and Queens County (Queens)

 

Click here to view tax burden data by state, type of tax, and for years 1950 to 2015.

 

Finally, don’t forget to watch our exclusive time-lapse video of state and local tax burdens over the last 65 years! See if your state has been above or below the national average?


 

 



Category: Tax Burdens

J. Scott Moody

J. Scott Moody has nearly 20 years experience as a public policy economist with a specialty in tax policy and has over 180 publications. He has worked for numerous national and state-based think tanks such as the American Conservative Union Foundation, Federalism In Action, Tax Foundation, Heritage Foundation, and The Maine Heritage Policy Center.


blog comments powered by Disqus

Check Out Our Unique Apps:

U.S. Capitol.jpg

Government Workforce

Tax Squeeze.jpg

Tax Burden

Strings Attached to Federal Dollars.jpg

Federal Tax and Spend

Hundred Dollar Bill.jpg

Cost of Living (COLI)

Baby.JPG

Demographic

Measuring a Dollar.jpg

Federal Tax & COLI

Retired.jpg

Federal Pension

United States Office of Personnel Management Seal.jpg

Federal Payroll

Check Out All Posts For Your State:

Alabama.jpg  Alabama

Alaska.jpg  Alaska   

Arizona.jpg   Arizona 

Arkansas.jpg  Arkansas

California.jpg  California

Colorado.jpg  Colorado

Connecticut.jpg  Connecticut

 Delaware.jpg  Delaware

Florida.jpg  Florida

 Georgia.jpg  Georgia

Hawaii.jpg  Hawaii

  Idaho.jpg  Idaho

   Illinois.jpg  Illinois

   Indiana.jpg  Indiana

  Iowa.jpg  Iowa

  Kansas.jpg  Kansas

  Kentucky.jpg  Kentucky

   Louisiana.jpg  Louisiana

   Maine.jpg  Maine

  Maryland.jpg  Maryland

Massachusetts.jpg  Massachusetts

Michigan.jpg  Michigan

Minnesota.jpg  Minnesota

  Mississippi.jpg  Mississippi

Missouri.jpg  Missouri

Montana.jpg  Montana

Nebraska.jpg  Nebraska

Nevada.jpg  Nevada

New Hampshire.jpg  New Hampshire

New Jersey.jpg  New Jersey

New Mexico.jpg  New Mexico

New York.jpg  New York

North Carolina.jpg  North Carolina

North Dakota.jpg  North Dakota

Ohio.jpg  Ohio

Oklahoma.jpg  Oklahoma

Oregon.jpg  Oregon

Pennsylvania.jpg  Pennsylvania

Rhode Island.jpg  Rhode Island

South Carolina.jpg  South Carolina

South Dakota.jpg  South Dakota

Tennessee.jpg  Tennessee

Texas.jpg  Texas

Utah.jpg  Utah

Vermont.jpg  Vermont

Virginia.jpg  Virginia

Washington.jpg  Washington

West Virginia.jpg  West Virginia

Wisconsin.jpg  Wisconsin

Wyoming.jpg  Wyoming