When we think taxes, the date that comes to mind is April 15 — the day our federal and state income tax returns are due. What should come to mind in New York is May 11. This is Tax Freedom Day in New York. It is the first day of the year in which New Yorkers theoretically have earned enough money to pay all their federal, state and local taxes. Up until May 11, everything you are earning is going to the government. Everything from May 11, you are keeping to do as you please with.
New York State is in an awful position in terms of tax burden. The national Tax Freedom Day is April 24, almost three weeks before New York’s. In fact, New York’s Tax Freedom Day is the 48th latest date in the nation with neighboring New Jersey being 49th and Connecticut being 50th.
For Americans, the overall tax bill is staggering. Americans will pay $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes for a total of almost $5 trillion. This does not include deductions for mandated programs like Social Security and Medicare/Medicaid.
In fact, Americans will collectively spend more on taxes in 2016 than they will on food, clothing and housing combined.
The State Senate Republicans pushed through a tax cut in this year’s state budget that, when fully implemented, should save an average middle class family of four around $800 a year. This seems to be the only good news on the tax horizon. And, in reality, the biggest burden for New Yorkers is not state taxes but rather federal taxes and property taxes which are essentially locally controlled.
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With federal taxes eating up so much of our annual income, you would think that all the candidates for president would be talking about ways of reducing them. Not so. In fact, the two Democratic candidates only discuss proposals that would result in our taxes going up. I found it striking that there was not one mention of high taxes having a negative effect on our economy or quality of life at the Brooklyn Democratic debate last week.
In fact, Bernie Sanders’s proposals to address what he describes as income inequality are no more than attempts to redistribute wealth and sizably increase federal spending. His rhetoric might sound great to a lower or middle-income family or young single person, but will eventually squeeze many more dollars out of their pockets. They will have less money to spend on what they want to spend it one, if Bernie Sanders becomes President. And, likely, it will be a lot less.
Hillary Clinton has also focused her campaign on a conversation that has at its core more programs, bigger government and greater spending. When compared to a socialist like Sanders, she comes across as more reasonable. But that is more of a sign of the times than a positive commentary on a candidate who was pushing national health care years before President Obama. She is trapped by her own base of supporters into guaranteeing that, if she is elected president, our federal taxes are sure to go up.
All the Republican candidates for president are placing an emphasis on their desire, ability and knowledge of how best to cut government spending and taxes. It’s good to know that on this issue there is solid agreement.
Obviously, neither Sanders or Clinton can grow government and raise taxes without the cooperation of Congress. A Republican Congress is unlikely to go along with most of their ideas. That is an important caveat we all should keep in mind when we vote for a full slate of candidates on November 8.