Against an Island Income Tax
By JOSEPH L. ANDRETTA,CPA
Op-Ed Contributor
The NY Times
Sunday July 16, 2006
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The tax code is used to generate social outcomes as well as revenue. So there will be winners and losers if, as some Long Islanders
have proposed, the tax base for our schools is shifted from property to income. But one thing is certain: the vast majority of us
will come out on the losing end.
And what a burden it is. A poll released last January found that 95 percent of Long Islanders view taxes as a serious problem. No
one who lives here was surprised by this virtually unanimous agreement. A recent study by the New York State comptroller, Alan Hevesi,
found that property taxes in Nassau County averaged $11,295 per household. The average in Suffolk County is $9,001 per household,
not as bad as Nassau but still close to double the statewide average.
If school spending continues to increase, local taxes will increase to cover the costs, whether
the source of financing is a property tax or an income tax. There is simply no way to give Long Islanders
tax relief while continuing to finance enormous school budgets.
Some argue that an income tax, though painful, is at least more equitable than a property tax. This
view is based on a belief that an income tax will soak the rich, which it surely will. Trouble is, the definition
of “rich” includes most of the residents of Long Island. Taxpayers considered “upper income” elsewhere turn
out to be your typical two- wage- earner families on Long Island, where the cost
of living is especially high.These taxpayers are already under pressure from phase-outs of
itemized deductions and from the federal alternative minimum tax, which hits more taxpayers
each year.
Police, fire, sewage and other local government services receive less than half the revenue collected from property taxes. Most of
the rest goes to our schools. Indeed, school taxes account for more than 60 percent of Long Island property taxes. Escalating salaries
and benefits, which consume roughly three-quarters of most school district budgets, are the main culprit.
Then there is the school bureaucracy. New York City Schools are overseen by a chancellor, three deputy chancellors and 10 regional
superintend-ents. Long Island schools, with less than half the student population of city
schools, are ad-ministered by more than 100 superintendents, each with a staff of deputies
and assistants trailing behind.
So the definition of “rich” will be a lot more in-clusive here than many would like. Elderly
people living on pensions, savings and Social Security may find they qualify for high-roller status.
Replacing the property tax with a local income tax is not a solution to the crushing tax burden many
Long Islanders face. Shifting from one form of taxation to another merely perpetuates that burden rather
than alleviating it.
Finally, if a county income tax is approved, how long before the local towns and villages initiate income
taxes of their own? Once released, taxes, like the proverbial
genie, refuse to go back in the bottle. And since any local income tax would almost certainly be administered by
the state, it won’t take long for politicians in Albany to come up with new and creative ways of spending the revenue — regardless
of what the original intent may have been.
It’s not surprising that some Long Islanders are driven by frustration to look for alternatives to high property taxes. But an income
tax will only make matters worse. And as we argue over new forms of taxation to solve our problems, spending on Long Island schools
continues unchecked.
In Long Island schools, median teacher pay is about one-quarter higher than in New York City schools, even
though city teachers arguably have more difficult jobs. Some Long
Island teachers make more than $115,000 a year. And pension and health benefits for Long Island educators are also generous.
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