New York Members Will Introduce Bill to Ensure Taxpayers in Most Expensive Cities Pay Fair Rate by Taking Higher Cost of Living into Account.
Today, on the official deadline to submit 2016 tax returns, U.S. Representatives Jerrold Nadler, Nita Lowey, and Tom Suozzi of New York, announced plans to reintroduce the Tax Equity Act. The bill would adjust federal income tax brackets to reflect the actual cost of living in major metropolitan areas, where higher tax burdens and higher basic living costs make it significantly more expensive compared to other areas.
“The Tax Equity Act is a practical approach to making tax brackets more fair and ensuring they reflect the actual cost of living in New York, San Francisco, Houston, or any high-cost city,” Reps. Nadler, Lowey, and Suozzi said in a joint statement. “One-size-fits-all tax brackets simply don’t work in the country’s most expensive communities where residents pay more for housing, food, transportation, and daily costs of life. This bill will ensure that tax payers in our districts – most of whom are just trying to make ends meet – are not hit with additional tax burdens that don’t reflect their day-to-day reality.
“The fact of the matter is, a family earning $50,000 a year in New York is in a very different financial situation than a family earning the same amount in a different part of the country, yet they are taxed the same way. Middle class families in our districts are taxed as if they are rich when that’s not always the case. Our tax code should reflect that difference and ensure hard-working, middle class families can continue to thrive in our nation’s largest, most-expensive communities.”
The three Democratic Members of Congress behind the Tax Equity Act legislation represent districts that span New York City, Westchester County, and Long Island – areas that experience higher tax and basic living costs than most other parts of the country. Even though a dollar does not go as far in these communities as it does elsewhere in the country, residents are taxed at the same level as someone living in a lower-cost area. The Tax Equity Act directs the Internal Revenue Service (IRS) to adjust tax brackets for major metropolitan areas with above average cost of living so as to better reflect the financial situation of taxpayers. Communities with average or low costs of living would not be impacted.