September 1, 2017. In this op-ed, Frederick Floss discusses Mayor Bill de Blasio’s proposal to raise the New York City’s income tax for individuals with an income over $500,000 and family incomes over $100,000 by 1.03%. Floss discusses the question of fairness that arises for those with higher incomes. He argues that there is an assumption that individuals in the higher income brackets do not benefit from the mass transit system. He argues that they do benefit because it will reduce congestion and help the workers get to work, which is good for business.
The only question on the fairness of this tax arises when looking at the benefit principle. Do those at the upper income levels benefit from the city’s mass transit system and will the improvements in infrastructure be greater for them than the costs. At first blush one might not think high income individuals use mass transit and therefore do not receive direct benefits from transit improvements. That would be short sighted.
First, a good mass transit system draws immigrants into the city increasing both the economy and the tax base. A 2016 study by the Fiscal Policy Institute showed New York City’s population would be over 3 million smaller without these immigrants most of who rely on mass transit. FPI further showed that immigrants pay more in taxes than they receive. Over time this means a lower tax burden, other things equal on all taxpayers.
Here is the link to Bloomberg BNA.