|The One Hundred! Heroes of Capitalism, Protectors of the Common Man!|
|Sunday, 31 January 2010 12:00|
The One Hundred! Heroes of Capitalism, Protectors of the Common Man!
Who are they? Who are these 100 unknown men and women who selflessly pick up the tab for New York City government so the rest of us can enjoy it for next to nothing? Mayor Bloomberg casually revealed their existence at last week’s FY2010 budget briefing when he warned against the suggestion of higher taxes.
“One hundred people pay ten percent of our income tax,” he explained with quiet assurance. If just a handful decided to pack up and move out because they felt threatened by rising tax rates, we’d be… well… screwed.
What? Can that really be? The City is budgeting .8 billion in personal income tax collections for FY2011. If these one hundred highest of all high earners are paying one tenth of that, it means that on average they are paying .8 million in City income tax each.
That is a lot of money! Each one of these citizens is paying for either four fire engine companies, 117 cops, an equal number of teachers or a whole basket of human services. A single .8 million income tax bill covers the cost of 33 school-year OST programs and 27 summer programs, which is a just a tad less than Mayor Bloomberg proposes to close next year. What happened? Did we lose one? Are there only 99 left?
Clearly, we do not want to be pissing these people off.
In fact, we should be actively looking out for their welfare. It would only take one bad batch of caviar at Le Circ or a multi-vehicle, stretch limo pile-up on Park Avenue to wipe out the entire Department for the Aging.
Maybe we should take a few of those 117 cops and provide round-the-clock police protection? Seriously, it might be a good investment.
But, really? .8 million? I don’t know about you, but my City income taxes never came to more than a few thousand dollars at most.
How much do these folks have to be earning to pay .8 million in City income taxes? The answer: 7 million a year. Assuming they are working full-time, that translates to about 6,000 for a 9:00-5:00 day or 2,285 per hour. But, they may be putting in overtime -- or even working two jobs – which would drop the hourly rate a little.
Obviously, the 100 are carrying quite a burden on our behalf. Luckily, they have help.
Roughly 4,900 of their friends and colleagues are picking up the next 20% of all income taxes, according to the Mayor. Since there are more of them to share the load, these 4,900, on average, only have to pay 8,245 in City income tax each. That sounds much more reasonable.
How much do these second tier moguls earn annually? About .6 million a year, according to my calculations. Wow! 4,900 New York households that make .6 million a year! That actually surprises me.
Then things start to go downhill. According to the Mayor, the next 25,000 households pay 30% of all income taxes. That equals an average tax bill of ,804 annually – and average yearly income of just .2 million. Somehow, this doesn’t seem to surprise anyone.
After that, forget it. The other half of our City’s income taxes is shared by roughly 1.7 million families and individuals. Another 1.7 million don’t pay anything at all because their income levels are microscopic. That is what happens when somewhere around 20% of families are living below the poverty level and many more are hanging on by a thread.
This outlandishly lopsided distribution of income tax collections – and income – clearly is a financial risk to the city. Half of our income tax base is comprised of less than 1% of our citizens. A tenth of all collections are paid by 3/1000s of 1%.
“The concentration at the top is very worrisome,” says Mayor Bloomberg. “Nobody is going to leave the country if the tax goes up on wealthy people but they certainly can leave the state or leave the city.”
The Mayor is right. This is very worrisome – and for more reasons than one.