Why NY+NYC income taxes are so high? What would it take to get down to 0% like Miami or Austin?

*New to NYC and the US so not even sure why would you have different tax rates within the same country

likefunny
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I grew up in Tennessee. No state income tax but one of the highest sales tax rates in the country. And then on the county and city level, taxes were also low which meant no sidewalks, no parks, schools where the kids shared textbooks and had class in trailers, etc. At the end of the day, they’ll either make up shortfalls through other taxation or they’ll cut services. Personally, I am not bothered by high taxes because, for the most part, it’s beneficial to the public as a whole. But maybe that’s the Scandinavian in me speaking 🙂

likesmartuplifting

Clarksville

likefunny

I actually was offered a job in Texas and turned it down. Based on what I heard from former New Yorkers who live there, essentially the cost comes out of you one way or another. For example, sales tax and real estate taxes are high in Texas. Plus there's a lot of things you get in New York that you don't get in Texas that you'll end up paying for. And in the end - you're still living in Texas, which is a huge state where you basically have to take a plane ride to go anywhere and honestly, they have nowhere near the culture and variety that we have here. It's cost of living is cheaper for a reason.

likesmartfunny

Attorney 1, I live in a small home in Staten Island, NY roughly worth 600k, I pay over 6k in taxes. My sister lives in a similar home in Long Island NY worth approximately 600k and she pays over 15k in taxes.

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Oh this is going to get wild, welcome to America we agree on nothing and everyone hates paying for things.

likefunnyuplifting

I think a reason many get frustrated with taxes in places like nyc versus in europe goes to a general pt of frustration about taxes in usa - people (rightfully or wrong) don’t feel they’re getting enough for the taxes they pay. In europe healthcare and education is covered largely thru taxes. In usa you’re paying nearly as much tax in some cities like nyc but left with a huge tuition bill for kids and healthcare costs. Also while it does cover infrastructure it’s not as clean and cheap as a lot of public and even private transport options as in europe

likehelpful

Germany is one example

And even in places like Switzerland that do not tie premiums to income, and operate with tiered private insurance, the basic level costs a healthy young adult $200 to $300 a month with a 2 to 3K annual deductible. I’m much happier with my current US employer sponsored plan here, more free checkups, etc

The best way to think about taxes in the US is that the US is somewhat akin to the Eurozone part of the EU. Each state (or country in the EU) has its own ability to create laws and levy taxes, but monetary policy and some laws are set at a higher level (Federal Government or EU). The higher level governments also levy taxes and distribute money across the entire entity. New York and California have adopted Northern European style taxation policies, which high income tax rates and lots of services. Other states have chosen different routes. Depending upon your political persuasion you’ll be more in favor of one model over the other. Like the EU though, any citizen can live in any state, so if you don’t like what you’re paying for in New York, you’re free to move to Florida if you so choose. (The biggest departure between the US and the EU is that the states don’t field their own militaries the way the EU nations do)

likesmarthelpful

Yeah plenty of European countries have these concepts too. Not sure where OP is from, maybe from a city state ?

Switzerland for example has 26 “states” and similar concepts of federal/state/local with a lot of flexibility to set tax rates at local levels.

like

Wait till you hear about state sales tax

likefunny

Social services in Florida are cut. Good luck collecting unemployment if you were ever fired without an emergency fund.

likesmarthelpful

Tell me about the Florida and Texas subway

likefunny

Because we’re actually trying to provide a basic safety net.

likefunny

It will never be able to be the same tax-wise. In addition to parks and transit, there is an incredible amount of infrastructure required to power one of the world’s greatest cities, much of it underground. Miami and Austin aren’t dense enough to require a lot of this. Building and maintaining it is very expensive. Some of it goes to social services as well. Taxes could certainly be reduced as there is tax money being grifted at every step of the process, artificially inflating the already high cost. I personally think property taxes should be raised and income taxes reduced, as the high income taxes are increasingly driving talent out of the city, some to NJ right across the Hudson. This will never happen though as it’s political suicide.

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NJ is not cheaper than NY. The money just gets spent in different ways. RE taxes in NJ are some of the highest in the nation, so the marginally lower income taxes get eaten up by the high RE tax. You might pay slightly less taxes if you're renting and you move to a NJ rental but then you're stuck buying a car and/or with a longer and more annoying commute. While there are people willing to make that tradeoff, I would hardly say it amounts to a "brain drain."

like

A republican. 😆

likefunny

Why are taxes so high in New York City? Because Comrade DeBlasio can’t keep his hands out of my damn pocket!!!!

like

Don’t worry, all governments are equally inefficient in the US

funny

As for the question of what it would take to get income taxes down to 0% in NYC? Tax evasion. But you might not like the public services in prison that much.

funny

OP where you from?

helpful

Please bring back the SALT deduction. 🙏🏼

Schools and hospitals are significantly better/more available than in rural towns with little or no taxes.

I’ve thought about this a lot but low taxes means you’re probably living in a place with horrible schools, terrible infrastructure, bad hospitals and high crime. I would never put my kid in a public school in FL for example. So I would likely have to pay for private school. Whereas in Long Island where I’m from, I’m paying $13k in taxes but I’m in a school district that’s ranked 10/10. The grass isn’t always greener.

Others have said it well. What you generally save in income tax you spend in property and sales tax and private school education and a second car and so on.

Beyond that the problem that the US spends a fortune on military means it's citizens see less of their tax for everyday things like child tax credits or free daycare or health-care than some other countries so become more resentful of the tax.

Your decision is an arbitrage decision. Optimally work in a high income low income tax place when you are young and single and need less housing and schooling. Move to a higher taxed well schooled place to educate kids. Move out of there when the kids go to college and then decide where you want your tax costs to be in retirement years.

Many in TX are desperate to downsize as no income tax makes housing high property tax and that does not work well in retirement.

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