Why taxes should be adjusted for geographic cost of living
Families in high-cost areas bear a heavier tax burden compared to those in lower-cost areas at the same standard of living.
Our national discussion regarding income tax brackets has so far failed to address one of the major inequities of America's tax system. Dual-income households living in high-cost areas shoulder a tax burden disproportionate to those at their same standard of living in the rest of the country. And, not surprisingly, Manhattan workers carry the heaviest load.
According to the Bureau of Labor Statistics, the 2010 average weekly wage in Manhattan was $2,404, or just over $125,000 a year. The top-heavy financial sector skewed these numbers, as did the 22 percent living in poverty. However, Manhattan wages are still higher than the national average across all supersectors.
Of course, Manhattan salaries are high for a reason: They must meet the basic costs of living there. A 2009 Center for an Urban Future study compared the costs of living in Manhattan with other areas around the country and concluded, "Income levels that would enable a very comfortable lifestyle in other locales barely suffice to provide the basics in New York City."