Term Paper: And Its History

Pages: 10 (2665 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Economics  ·  Buy This Paper

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[. . .] It would dramatically raise the percent paid out to as much as 2.75%, while handing an income tax cut to city residents."

This means that the commuters would be paying six times more than they paid under the former tax system.

Asking others to pay nearly six times more than they paid under the old tax - for a total of about $1 billion yearly - when the city is cutting income taxes on its own suggests a level of political arrogance that is mind-numbing."

Those who are against the commuter tax want the city to tighten its financial belt and locate new avenues of locating funds to pay for the services it publicly offers. According to those against the tax the commuters are already putting tens of thousands of dollars into the city wallet each week and taking more from them is punitive and might backfire in the long run. If the commuter tax gets to be to much many commuters will stop coming into the city to work and will instead locate positions outside of the city. In addition there will be the chance that companies will bow to pressure by workers and will begin to locate their satellite offices outside of the city and new companies looking for a place to land will not look within New York City limits because they will have a more difficult time attracting workers.

All of these things will have a negative impact on the financial contribution the commuters currently make to the city budget. In addition if the tax becomes to much of a burden the commuters may get a movement together to boycott spending any money in the city. This could cause a serious dent in the revenue they had been providing if more than 800,000 commuters AND their family members top spending any money in New York City because of the commuter tax.

Bloomberg needs to make good on his threat to expand on the token layoffs of city employees hired when times were fat. That's what organizations are supposed to do when faced with sharp shortfalls in revenue. Bloomberg also needs to expand his public-private initiatives that seek to generate new sources of revenue and he needs to get his hands out of the pockets of commuters who already put tens of millions of dollars into the city's economy every day. The governor and members of the Legislature should continue to stand up against a tax so onerous it could end careers, redirect investment and greatly accelerate the city's financial woes. Bloomberg, who knows how to read a ledger better than any recent resident of the mayor's office, should appreciate more than the average politician that taxing your way out of a financial hole only creates a very bigger crater. Confiscatory taxation at a time when the city needs to attract new business, new investment and a broader confidence in its future is the wrong remedy."

This is not the first time a commuter tax has been implemented. Years ago the city had another commuter tax and it was taken to court several times over the fact that the tax was assessed on an entire family income even when some of those wages came from jobs that were done outside of the city limits.

At the time the court argument was the commuter tax had an impact on the entire family income. "The spouse's income isn't taxed directly, but its inclusion can push the commuter's tax into a higher bracket. Here's how it works: A New Jersey woman earns $20,000 in New York. With deductions and exemptions, her taxable income probably would be about $11,000. Under the method used until 1987, she would pay New York $440 in income taxes, at a tax rate of 4%. But now she must figure in her husband's New Jersey salary of $80,000. That kicks the couple into New York's top 7.875% rate, and she must pay $866 in taxes. The couples in the lawsuit argued that the formula amounts to a tax on their New Jersey and Pennsylvania incomes. New York countered that it is fairer than taxing couples as though they are in a lower tax bracket than they really are. "Plaintiffs' real quarrel, in the end, is with the graduated tax, " agreed the New York Court of Appeals in its ruling."

CONCLUSION

The idea of bringing back a commuter tax is not new. It is something that has been kicked around for several years. The need to produce revenue to pay for the many public services New York City provides is becoming important as the need for services continues to grow. The idea of a commuter tax on the surface looks like it would solve a lot of NYC's financial problems but in the long run it would bring on more. The commuter tax would only serve to offend commuters and their families which might lead to a larger financial reduction by way of boycotts and changing jobs than a tax would bring in. Rather than implement a commuter tax the city would be better served locating other means of revenue for the public services it provides. Taxing and driving out the commuters will only worsen the situation.

References

ELISE YOUNG and HUGH R. MORLEY, STAFF

WRITERS, No way, commuters say., The Record (Bergen County, NJ), 11-15-2002, pp A01.

Paul J. Hendrie, Record Staff Writer, COMMUTER TAX WAR DECLARED., The Record (Bergen County, NJ), 02-25-1992, pp a01.

PIA SARKAR, Staff Writer, RULING ELIMINATES COMMUTER TAX IN N.Y.., The Record (Bergen County, NJ), 06-26-1999, pp a01.

H.J. Cummins, Commuter Tax Policy Stands Court won't review NY case., Newsday, 06-22-1993, pp 07.

Liam Pleven, Matthew Cox, Commuter Tax Axed / Eyes on suburban voters, lawmakers speed through repeal., Newsday, 05-18-1999, pp A03.

Desmond Ryan, Commuter Tax Merits Fast-Track Derailment., Newsday, 04-09-2003, pp A34.

Dan Janison, Andrew Metz, A Taxing Time / Bloomberg says city has found strength to withstand hikes., Newsday, 11-19-2002, pp A03.

OVETTA WIGGINS, Trenton Bureau, VETO COMMUTER TAX RELIEF, PATAKI TOLD., The Record (Bergen County, NJ), 05-19-1999, pp a03.

Paul Moses, CITY POWER / Commuter Tax Can Give Us a Lift., Newsday, 10-23-2001, pp A40.

Author not available, Terrible tax., The Record (Bergen County, NJ), 11-17-2002, pp O02.

Keith Connors, Michael Melgar, Todd Rogers, William O'Hara, LETTERS / Tax Is Way Off Track., Newsday, 11-19-2002, pp A34.

Bud Guitrau, Commuters Are Being Taken for a Ride., Newsday, 11-18-2002, pp A39.

Paul Vitello, Giving the Taxman His Due., Newsday, 11-17-2002, pp A08.

BAD SHOT IN A WAR BETWEEN THE STATES

Relevance: 100%; Date: 2/9/1992

Publication: The Record (Bergen County, NJ); Author: None; Source: Newspapers

LIers Feel Taxed / Commuters rail against mayor's city income tax proposal

Relevance: 100%; Date: 11/14/2002

Publication: Newsday; Author: Dan Janison, Dionne Searcey,, Jennifer Sinco Kelleher, Valerie Burgher.; Source: Newspapers

Vitello, Paul. Giving the Taxman His Due. Newsday; (2002).

Taxing Time / Bloomberg says city has found strength to withstand… [END OF PREVIEW]

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