Some for Me, Some for Them, None for You.
I mailed off our tax returns today. We lost a little to the feds, lost a lot to New York, and got a lot back from New Jersey. Net result: about $300 back to us.
It’s the state taxes I want to discuss. We have to fill out two state tax returns because New York employs some kind of rule that people working in New York owe them money, even if they live out of state, even—as in Eileene’s case—they work at home for a business nominally headquartered in New York. Because New York withholds none of our income, we have to cut them a check every year. Because New Jersey does withhold income, but gives us a sizeable reduction for taxes paid to another state, they have to cut us a check every year, in return.
This really irks me, and not just the nuisance of filling out two returns, or the delay between mailing a check and waiting for the bureaucracy to send us one. Where does New York get off, taxing people from other jurisdictions? And why do neighboring states put up with it? As a matter of raw power politics, I can see why New Jersey, Connecticut, Pennsylvania, and others might knuckle under: if they didn’t cut their residents a break, they’d lose residents unwilling to pay two state taxes. It seems to my legally uneducated mind that serious grounds for a suit exist here. Perhaps the outlying states have already tried legal suit and failed. But if it goes that far, why bother retaining residents who are sending their taxes to another state, but draw on the services of their own? Let them move, and let them strain New York social services. If we’re lucky, the really bad drivers will be the first to move.
Upstate New Yorkers complain a lot about NYC’s dominance of state politics. They may have a point, if more money flows into the metropolis than out. Or maybe not. It depends on just what forms of money transfer you count. When they do, the root argument is always that NYC bullies its way around state politics, and state budgets, because it can. Yet the upstaters don’t seem to have any problem with New York state doing the same to other states equally in the orbit of New York City. Hypocrites.