Afternoon Read: Another look at the NYS tax changes
Many of you were confused (or perhaps annoyed) by the table I posted a couple of days ago in my blog entry on the new tax rules, finding it somewhat internally contradictory.
The investigative news organization (and sometimes NPR partner) Propublica has an article today that makes it clear why some are saying taxes are going down for the superrich, and others are saying they’re going up.
Here’s a teaser:
“Under the overhaul, which was passed on Thursday, one bracket of wealthy New Yorkers will be getting a bigger tax cut than the taxpayers in any other bracket. Specifically, individuals making between $500,000 and $2 million will pay 2.12 percent less in state income taxes for 2012. In contrast, individuals making between $40,000 and $150,000 are only getting a reduction of 0.4 percent, as this New York Times chart shows.”
What, you say? Everyone said they’re getting a tax hike! Well, they are, relative to the base tax rate in NYS:
“New York Gov. Andrew Cuomo — and apparently, much of the media — has been using New York’s base rate of 6.85 percent to calculate the “raised” taxes for the rich. But for the past three years, wealthy New Yorkers making more than $200,000 (or $300,000 for households) have paid the base rate along with an income-tax surcharge on top of it. It’s also known as the “millionaires’ tax,” and it expires at the end of this year.”
Enjoy!
Tags: economy, politics, tax policy
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We wont hold it against you personally, Nora. Not while you have this happening:
http://www.huffingtonpost.com/2011/12/07/jay-carney-economy-recession_n_1134196.html
Personally, I would like to know at what income level one becomes rich.
According to the story the other day, the top middle class bracket is $300,000 to $2,000,000 (filing jointly). That being so, rich doesn’t start until you exceed the $2,000,000 mark.
PNElba,
Some people are “rich” with an income of $20,000 and some people are never “rich” no matter how much they make.
What I find goofy in all of this is the state and the feds having big deficits and claims of going broke while they trip over each other to lower taxes.
To me the dumbest idea of all and a perfect example of the above is to lower the payroll tax (social security fund) and then complain the fund will go broke if it isn’t fixed.
Pete, I don’t think the lowering of the payroll tax will have any effect at all on the SS fund going broke. After all the Fed gov dosesn’t set aside any of the money to use to pay future beneficiaries and never has. It all gets spent on running other federal programs and making the federal debt look lower than it actually is. If the gov had set aside all the payroll taxes back when SS prog was initiated we wouldn’t have the problem of it going broke. I can dream can’t I?
“an income-tax surcharge” What is/was the surcharge? Why don’t these stories provide that detail?
knuck, thanks for the link:
An important lesson in this quote regarding Ford’s speech in 1974:
“He wanted to deregulate the economy to increase proficiency and to enact a temporary tax surcharge of 5 percent. His requests were not granted. The next year, unemployment jumped to 8.5 percent, the highest since The Great Depression. Worse still, inflation continued to rise an additional 9%. Economic conditions continued to deteriorate until a year later when Congress enacted a tax cut proposal and a tax rebate. It is this rebate, not Ford’s effort, that is credited with ending the recession”
Tom, there is a SS Trust Fund but as usual with the government, things are a bit confusing. Without going into all the details, it basically comes down to this. The money is collected via the payroll tax. It is then invested in government backed securities that the government bowers from with interest. So as long as the government doesn’t go bankrupt, the trust fund is currently safe and in the black.