Study: NY, NJ To Pay 25% Of New Obama Health TaxBy Marcia Kramer
WCBS-TV, New York
February 24, 2010
NEW YORK (CBS) ¯ President Barack Obama's new health care plan really socks it to New York taxpayers and its bad news for residents of New Jersey and Connecticut, too.
The numbers are eye-popping. President Obama's plan to tax investment income to pay for his health care package would force New Yorkers to fork over an additional $4.8 billion in taxes on money they get from interest, dividends and other investments.
But here's the rub: a study by the Manhattan Institute finds that New Yorkers will pay 12 to 15 percent of all the funds raised by the new investment tax. New Jersey residents will pay 7 to 9 percent. That's nearly 25 percent of the entire tax.
The hit to area taxpayers is so staggering that experts wonder how our congressmen and senators can support it.
"It's like imagine a giant sucking machine taking dividend and interest income and sending it from New York to Washington, which is not a great thing at any time, but particularly if we continue to struggle economically in the state," said the Manhattan Institute's Steven Malanga.
The question is so politically volatile that a number of congressmen didn't return CBS 2 HD's calls to see if they support the president's plan, chief among them Congressman Charles Rangel, head of the tax writing Ways and Means Committee.
At least one Democrat broke ranks.
"Taxes on income, taxes, on dividends … we are a very high-cost state so we will pay a larger portion of that burden so I'd rather have a tax that's fairer, more across the board, something like taxing the profits of insurance companies I think is better," Sen. Kirsten Gillibrand said.
"This is a disaster for New York," Rep. Peter King, R-Long Island, said. "Of all the plans by the president this is one of the worst as far as the terrible impact and the damage it's going to do to New York."
If this tax is allowed to stand it will deepen the sea of red ink in New York, New Jersey and Connecticut.
The president also wants to increase Medicare taxes for couples who make over $250,000 -- another tax that hits our area harder than the rest of the country.