Sneaky Progressive Tax Day -- 2006 Edition
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Dear Homeowner:
Martha E. Stark
Finance Commissioner
And this will therefore be the third time I have blogged about it, first with a post, reprinted below, from February 7, 2005, followed up by this post from October 16, 2005.
Two items of note this year:
--The State of New York is now mimicking the City's program with its own tax rebate check placebo. It's a placebo, because tax rates aren't changing; an already-established rolling tax reduction program is merely being reconstituted as a tax-and-rebate program, complete with mailed checks. The maximum check will be $50. A lot of effort for not a lot of money and exactly zero added tax relief. Splendid.
--The IRS has put the City on notice that these rebate checks are taxable income for any federal income tax payer who itemized their property taxes in the corresponding year. This is a fair and obvious interpretation of the Internal Revenue Code, but it is also a major headache for both the City and taxpayers. A headache that would not occur if the City simply lowered tax rates. Splendid.
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No, I'm not being sarcastic. The problem with Mayor Blooperberg's little publicity stunt is that it's a flat refund — everybody got the same $400, regardless of how much property tax they actually paid.
Just as a lump-sum bill is a regressive tax (the poor pay a higher percentage of their income), so too is a lump-sum rebate a progressive tax (the poor receive a higher percentage of their income back and the net tax schedule becomes even more progressive).
As the joke goes, you don't have to be a rocket surgeon to figure that out.
I paid $3,048 in property taxes in 2004 and got $400 back. Someone who paid $30,048 would have also gotten $400 back. Someone who paid $448 would have also gotten $400 back.
Is this what Blooperberg considers fair?
Even the most brazen socialists must have some limits. Or do they?
And as a sidebar: The stunt of physically mailing checks (at what cost, incidentally?), with Blooperberg's warm-fuzzy-feeling message certainly has no ulterior motive — right? Mayor Mike's above that sort of petty politicking just as his re-election campaign is getting underway — right?
And gee, where could a Republican possibly have gotten such a noxious idea?
Oh, right, from this guy. Silly libertarian me...
Now where did I put those deposit slips?
The Mayor and the City Council have a approved a third property tax rebate. Your enclosed rebate check is the City's way of thanking you for keeping New York City strong during difficult times.Sincerely,
Martha E. Stark
Finance Commissioner
And this will therefore be the third time I have blogged about it, first with a post, reprinted below, from February 7, 2005, followed up by this post from October 16, 2005.
Two items of note this year:
--The State of New York is now mimicking the City's program with its own tax rebate check placebo. It's a placebo, because tax rates aren't changing; an already-established rolling tax reduction program is merely being reconstituted as a tax-and-rebate program, complete with mailed checks. The maximum check will be $50. A lot of effort for not a lot of money and exactly zero added tax relief. Splendid.
--The IRS has put the City on notice that these rebate checks are taxable income for any federal income tax payer who itemized their property taxes in the corresponding year. This is a fair and obvious interpretation of the Internal Revenue Code, but it is also a major headache for both the City and taxpayers. A headache that would not occur if the City simply lowered tax rates. Splendid.
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Dear Homeowner:I hate getting money in the mail like this!
On July 21, 2004, the City Council voted into law my rebate proposal allowing me to present you with the enclosed property tax rebate check. This rebate honors the sacrifices you made in order to help New York City's recovery during difficult times.
Sincerely,
Michael R. Bloomberg
No, I'm not being sarcastic. The problem with Mayor Blooperberg's little publicity stunt is that it's a flat refund — everybody got the same $400, regardless of how much property tax they actually paid.
Just as a lump-sum bill is a regressive tax (the poor pay a higher percentage of their income), so too is a lump-sum rebate a progressive tax (the poor receive a higher percentage of their income back and the net tax schedule becomes even more progressive).
As the joke goes, you don't have to be a rocket surgeon to figure that out.
I paid $3,048 in property taxes in 2004 and got $400 back. Someone who paid $30,048 would have also gotten $400 back. Someone who paid $448 would have also gotten $400 back.
Is this what Blooperberg considers fair?
Even the most brazen socialists must have some limits. Or do they?
And as a sidebar: The stunt of physically mailing checks (at what cost, incidentally?), with Blooperberg's warm-fuzzy-feeling message certainly has no ulterior motive — right? Mayor Mike's above that sort of petty politicking just as his re-election campaign is getting underway — right?
And gee, where could a Republican possibly have gotten such a noxious idea?
Oh, right, from this guy. Silly libertarian me...
Now where did I put those deposit slips?
Related Posts (on one page):
- Should There Be a Tax Credit for Rent?
- Sneaky Progressive Tax Day -- 2006 Edition
- Sneaky Progressive Tax Day -- 2005 Edition
- Anybody But Bloomberg: "Happy Sneaky Progressive Tax Day"
Posted by Kip on
2 October 2006
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