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A new report jointly released by the Economic Policy Institute in Washington and the Fiscal Policy Institute in Albany revealed that New York State leads the nation in income inequality. The report says that in 2013, 31% of all income was earned by the top 1% of the population. FPI says the report supports its advocacy for the state to extend the “millionaire’s tax” which is set to expire in 2017.
“Great income inequality is not a new phenomenon, and it’s not confined to large urban areas or only some parts of the nation,” said Ron Deutsch, Executive Director of the Fiscal Policy Institute (FPI). “It’s a persistent problem throughout the country—in big cities and small towns, in all 50 states. In the face of this national problem, we need policy solutions to jumpstart wage growth for the vast majority and sensible tax and budget policies in New York.”
Given New York’s extreme income polarization, FPI’s deputy director James Parrott emphasized that “The State’s top economic priority in 2017 has to be to have our leaders in Albany act to permanently replace the current “millionaires’ tax” with FPI’s 1% Plan for New York Tax Fairness that would add four new, high-end tax brackets.” The millionaires’ tax expires at the end of 2017 and if it is not extended, the wealthiest 1% of state taxpayers will get a $3.7 billion windfall at the expense of New York’s faltering budget. Non-resident commuters working in New York now pay 17% of that amount.
Regarding New York, the report’s key findings include:
The top 1 percent earned 45 times more than the bottom 99 percent in New York, the greatest disparity of any state. Connecticut ranked second with a top-to-bottom ratio of nearly 43. Wyoming was third, followed by Nevada and Florida.
The average annual income of the top 1 percent was $2 million (Table 1), and New York’s richest 1/100 of top 1% (“the 1% of the 1%”) had average incomes of $61.6 million, second to Connecticut’s $69.5 million.
Within New York State, only two counties—New York (Manhattan) and Westchester—have greater top-to-bottom income ratios than the state overall. In Manhattan, the average income of the top 1% ($8.1 million) was 116 times that of the 99% ($70,500), while in Westchester County, the average income of the top 1% ($4.3 million) was 54 times that of the 99% ($80,300).
High levels of income polarization are not limited to downstate New York. The third most income-polarized county was Saratoga, north of Albany, where the $1.8 million average income for the top 1% was 35 times that of the $51,500 average income for the 99%.
A three decade-long era of shared prosperity came to an end in 1979 when the 1%’s income share started to rise dramatically in New York and in every state in the United States.
Since 1979, the average incomes of the top 1% have grown by 272% in inflation-adjusted terms in New York, while the average incomes of the 99% rose a meager 5.4%.
FPI is a member of the Economic Analysis and Research Network and co-released the new report today in New York.