New York Ranks Near The Top....In Taxes.

6:30 PM, Mar 19, 2013   |    comments
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BUFFALO, NY - If you've suspected the taxes you pay as a resident of New York State are among the highest in the nation, you were right.

For the 72nd consecutive year, the Washington, D.C.-based Tax Foundation has compiled an annual report comparing the tax structure in all 50 states, and once again the Empire State
ranks at or near the top in most of more than two-dozen categories of tax levies.

WEB EXTRA: Follow this link to the Tax Foundation Report "Facts & Figures: How Does Your State Compare?"

New York has the highest state and local taxes per person, and the highest state and local taxes as a percentage of income. New Yorkers, by far and away, pay the highest taxes for gasoline and cigarettes.

From Long Island to Buffalo, those who reside and work here are subject to the second latest "Tax Freedom Day", defined as the date by which a worker has earned enough to pay all of their taxes (which this year will roll around on May 1st).

We also pay the third highest state and local cell phone taxes of any state in the nation, and the seventh highest sales tax on average.

Despite all the taxes it collects, New York, perhaps incredibly--also carries the highest debt per person of all states.

The Tax Foundation describes itself as a non-profit, non-partisan tax research organization, although a check of its current and most recent board members reveal many of them come from the ranks of industry or had served with republican Presidential administrations. 

Tax Foundation economist Scott Drenkard served as editor of the report, and believes part of the reason for New York's high taxes rests with its complex tax structure. He told WGRZ-TV that states with lower taxes tend to tax a variety of things at a similar rate, thereby expanding the base of taxpayers from which money can be collected, thereby lowering rates overall.

"New York, by contrast, goes against a time tested method of collecting taxes, and has very narrow bases and high rates, so policy makers end up creating winners and losers through the tax code, by having high rates which some people have to pay, with favored groups paying lower rates," said Drenkard.

"Another part of it is the size of government...but that doesn't mean you can't have a simple, neutral, stable tax code, so there's a lot of changes New York can make to move in that direction, even while maintaining very generous government services," Drenkard said. "Taxes are the one thing lawmakers can change and make better today that can have a meaningful impact on economic growth and competition." 

"You're paying taxes on top of taxes on top of taxes. It's insane," said Peter Grimm, a financial planner and investment adviser with The Financial Guys in Williamsville.

As someone who tries to guide clients toward their hoped for path to financial security, it's almost with sadness (and without hesitation) that he describes the quickest, and surest way to raise your bottom line.

"You can raise it by getting out of New York State. The list of taxes and fees goes on forever, and the biggest issue for most is the property tax," Grimm  said.

New York has the fifth highest property taxes in the nation, according to the Tax Foundation report.

"I think what happens around here is that people get mesmerized," said Grimm. "They're taxed no matter what they do...a driver's license, a dog license, a hunting license...a small business license, an insurance license...there's always some big fee tacked on to everything, and that fee is just another name for a tax."

Would someone move from New York purely to escape higher taxes? Both Grimm and Drenkard agree that someone making a move might not do so directly because of taxes.

However, there are some indirect, very real reasons involving taxes, which would cause someone to move.

"Businesses can define the movement of people," said Drenkard. "And when it comes to taxes, New York is actually the worst state for businesses, ranking dead last...or 50th overall."

And where Business chooses to locate and offer jobs, families are soon to follow.

Follow Dave McKinley on Twitter: @DaveMcKinley2


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