Today, Congressman Jerrold Nadler (NY-08), Congresswoman Nita Lowey (NY-18) and Congressman Steve Israel (NY-02) announced their introduction of the Tax Equity Act of 2009, an important piece of tax legislation designed to adjust federal tax rates to account for the actual cost of living in major metropolitan areas. As representatives of, respectively, New York City, Westchester County, and Long Island, these three lawmakers serve constituents who simultaneously pay higher taxes and spend a larger proportion of their incomes on basic necessities than most Americans. This bill would require the IRS to adjust tax brackets proportionally in regions where the average cost of living is higher than the national average.


“This overdue tax legislation is, pure and simple, about instilling fairness into our federal income tax system,” remarked Rep. Nadler. “As New Yorkers know too well, the basic costs of life in the New York region are much steeper than in most parts the country. The reality is that a dollar in New York isn’t worth nearly as much as a dollar in Spokane or Knoxville or Topeka. It’s time for our tax code to take reality into account when assessing someone’s tax liability.”

“When it comes to the tax code, one size just doesn’t fit all,” said Rep. Lowey. “Residents of the New York metropolitan area pay more for housing, food, and utilities, not to mention some of the highest property taxes in the country. “Making ends meet is difficult in our region even for those with good jobs. It is only fair for the tax code to reflect that reality.”

“A six figure income in Islip is not the same thing as a six figure income in Idaho,” said Rep. Israel. “New Yorkers pay some of the highest taxes in the country, but we also pay some of the highest housing, food and gas costs. Middle class and working families in New York are taxed as if they were rich, and that’s not fair. Our plan for a regional cost of living adjustment will bring fairness back to the tax system and lessen the burden on New York’s middle class and working families.”

Residents of the nation’s most expensive areas – i.e. New York, San Francisco, Los Angeles, Honolulu, Washington – spend a greater share of their paychecks on everyday necessities and, hence, their incomes are stretched thinner than those living in other areas. Yet, New Yorkers and others are taxed the same as the rest of the country, which produces an unfair burden on New Yorkers and other metropolitan residents. The Tax Equity Act of 2009 would ensure that no such burden exists and would require people to pay only their fair share of taxes. This bill would not affect the taxes of people living in regions with a cost of living that is below the national average.