Crains New York - February 11, 2013 - (Page 11)
CAROL KELLERMANN
NY’s people strengths
need constant work
T
he late Ed Koch proclaimed New York City the
“capital of the world,” and many New Yorkers
would agree with him.But we have competition—
not just from international financial capitals London, Hong Kong and Singapore, but also from
U.S. regions like the Capital Beltway and Silicon Valley. These
places are attracting highly educated workers at a greater rate
than the New York metropolitan area, according to a Citizens
Budget Commission analysis.
Human capital is a hot topic.
Thriving in the information economy requires a highly skilled workforce
with specialized expertise and an ability to innovate. Attracting such a
workforce is essential to New York’s
ability to retain strength in core industries and cultivate emerging ones.
We compared the attractiveness
of our metro area with that of the 14
other largest areas in the U.S. The
resulting “competitiveness scorecard,” available at www.cbcny.org,
benchmarks performance in demographics, human-capital development and quality of life.
The New York metro area ranks in
the top tier on many indicators. It has
about twice the number of people
with master’s degrees as the second-
largest city, Los Angeles, and is very
competitive in attracting and retaining highly skilled individuals. The
area’s strength comes from reputable
higher-education institutions, robust
employment opportunities and competitive pay in key industries. Its reputation as the nation’s safest big city,
its world-class cultural institutions
and its ample recreational opportunities are also advantages.
But Washington, D.C., and Silicon Valley (including the San Francisco and San Jose areas) are challenging us on important measures.
Both surpassed New York in net immigration of highly educated individuals between 2009 and 2011.
Washington and Silicon Valley also
have the greatest share of their private employment in professional
A taxing question:
Are rates too high?
B
eing a millionaire in California became a lot more
expensive this year with the “fiscal cliff ” deal that
raised federal taxes on the wealthy and the imposition of a state income-tax surcharge that hiked
the highest rate to 13.3%. In all, California millionaires face a marginal tax rate of 51.9%, the highest in the
nation. The New York Times wondered last week if millionaires
would be decamping for greener pastures, especially the eight
states with no income tax.
At the bottom of the Times story
was an important fact for New York
City.The federal increases mean the
top marginal tax rate for city millionaires is virtually the same as California’s, at 51.7%. Some of the Democratic candidates for mayor want to
raise it so that New York City can
again boast the highest tax rate in the
land. They think this is a good idea.
The accompanying chart, taken
from a study of state tax rates by Gerald Prante at Lynchburg College in
Virginia,shows the competitive position of New York City, the rest of the
state and the other high-tax states.
Remember, New York is the only city
in the U.S. with a progressive income
tax. Most other places impose payroll
taxes, paid primarily by employers.
“Marginal” refers to the highest
tax rate, applied to income over a cer-
GREG DAVID
tain amount. For federal payers, it’s
$450,000 for families under the latest
Washington deal, and in New York
City, it’s $2 million for families. For
some New Yorkers, their effective tax
rate—taxes paid as a percentage of all
their income—is even more painful.
New York Times columnist James
and business services, information
industries and financial activities,
although total employment levels
are greater in New York.
Six metro areas have higher rates
of business creation than we do, and
both Silicon Valley and New England have been attracting more venture capital. We lag far behind Silicon Valley in entrepreneurship, but
our weakest performance is on quality-of-life measures—particularly
the affordability of rent and the
length of commuting times.
Highly educated talent is mobile,
so we need policies that reinforce and
enhance our attractiveness as a place
to live and work. These should include efforts—like the Bloomberg
administration’s Applied Sciences
Initiative that brought Cornell University to Roosevelt Island—that
support education in fields where the
metro area lacks depth, foster affordable workspaces for startups, improve
broadband and Wi-Fi connectivity,
advocate for visa protocols that allow
foreign students to work and become
residents, improve mass transit and
stimulate housing development.
New York cannot afford to take
our competitiveness for granted.We
must constantly assess and adapt to
maintain our leadership. The competitiveness scorecard offers policymakers a tool to benchmark our performance and make improvements
to strengthen growth in a rapidly
changing economy.
Bringing clients to the next level
Industries served:
Financial Services . Manufacturing & Distribution . Technology
. Retail . Construction . Architecture & Engineering
Real Estate . Healthcare . Transportation & Shipping
488 Madison Avenue, New York, NY 10022
50 Jericho Quadrangle, Jericho, NY 11753
www.grassicpas.com
Carol Kellermann is president of the
Citizens Budget Commission.
TOP MARGINAL
TAX RATES
California
New York City
Hawaii
Oregon
New Jersey
Washington, D.C.
Wisconsin
Maryland
New York state
Maine
Nifty 8*
51.9%
51.7%
50.5%
49.9%
49.3%
49.3%
49.3%
49.2%
49.2%
49.0%
42.8%
*Those with no state income taxes: Ark., Fla., Nev., N.H.,
S.Dak., Texas, Tenn. and Wyo. Source: Gerald Prante
Stewart illustrated this point in two
brilliant pieces last year. Because he
lives in New York City and much of
his compensation is freelance book
royalties, Mr. Stewart pays regular
income taxes, the federal alternative
minimum tax, the self-employment
federal payroll tax, the city income
tax, the unincorporated business tax,
even the MTA payroll tax. His effective tax rate was 37% in 2010 (compared with Mitt Romney’s 13.7%
that year), before dropping to 33% in
2011. He paid 74% of all his taxable
income to governments in 2010.
Mr.Stewart makes it plain he’s not
leaving the city he loves. The Times
quotes entertainment zillionaire
David Geffen saying the same about
California. The question is whether
everyone else who is rich agrees. The
next year or two will show how much
taxes matter to rich people.
February 11, 2013 | Crain’s New York Business | 11
http://www.grassicpas.com
http://www.cbcny.org
http://www.grassicpas.com
http://www.crainsnewyork.com/2013TopEntrepreneurs
http://www.crainsnewyork.com/2013TopEntrepreneurs
Table of Contents for the Digital Edition of Crains New York - February 11, 2013
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
BUSINESS PEOPLE
CORPORATE LADDER
OPINION
GREG DAVID
REPORT: SMALL BUSINESS
THE LIST
CLASSIFIEDS
DIGITAL NY
FOR THE RECORD
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS
Crains New York - February 11, 2013
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130812
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130729
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130722
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130715
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130708
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130624
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130617
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130610
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130603
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130527
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130520
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130513
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130506
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130429
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130422
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130415
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130408
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130401
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130325
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130318
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130311
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130304
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130225
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130218
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130211
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130204
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130128
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130121
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130114
https://www.nxtbook.com/nxtbooks/crainsnewyork/20130107
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121224
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121217
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121210
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121203
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121203_v2
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121126
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121119
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121112
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121105
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121029
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121022
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121015
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121008
https://www.nxtbook.com/nxtbooks/crainsnewyork/20121001
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120924
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120917
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120910_v2
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120910
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120827
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120820
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120813
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120806
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120806_v2
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120730
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120723
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120716
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120709
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120625
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120618
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120611
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120604
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120528
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120521
https://www.nxtbook.com/nxtbooks/crainsnewyork/20120514
https://www.nxtbook.com/nxtbooks/crainsnewyork/nxtd
https://www.nxtbookmedia.com