Would raising property taxes be good for low-income New Yorkers?:
Mamdani Needs to Catch the Value Capture Bus – Dollars & Sense/Polly Cleveland
Property taxes can be regressive, meaning they impact low-income people the most. Landlords pay them and pass along the cost to their tenants. Instead of raising property taxes, why not discount them for landlords charging affordable rents?
BTW, NY city and state income taxes are among the most progressive in the country.
Key Findings
- “The vast majority of state and local tax systems are regressive, or upside-down. This requires a much greater share of income from low- and middle-income families than from wealthy families. The absence of a graduated personal income tax in many states and a heavy reliance on consumption taxes contribute to this effect.
- The lower one’s income, the higher one’s overall effective state and local tax rate. On average, the lowest-income 20 percent of taxpayers face a state and local tax rate nearly 60 percent higher than the top 1 percent of households. The nationwide average effective state and local tax rate paid by residents to their home states is 11.4 percent for the lowest-income 20 percent of individuals and families, 10.5 percent for the middle 20 percent, and 7.2 percent for the top 1 percent.
- In 41 states, high-income families are taxed at lower rates than everyone else. Our analysis sorts taxpayers into seven income groups and finds that in most states the top group, representing the top 1 percent of earners, pays a lower rate than any other group. Similarly, 42 states tax the top 1 percent at a lower rate than the bottom 20 percent, while 46 states tax the top 1 percent less than the middle 60 percent of earners.
- In 35 states, low-income families are taxed at higher rates than everyone else despite having the least ability to pay. Six states plus D.C., on the other hand, tax low-income families at lower rates. Nationally, comparatively high tax rates on low-income families remain the norm, despite recent steps to lower taxes for this group by bolstering refundable tax credits. Only six states and the District of Columbia now reserve their lowest overall tax rates for low-income families. Those states are Maine, Minnesota, New Jersey, New Mexico, New York, and Vermont.
- Tax structures in 44 states exacerbate inequality...”