New York's well-off: Yes, we can pay taxes
Though Kevin Johnson will likely feel the income tax bite under Obama, he has donated time and money to the Democrat's campaign. (RJ Mickelson/amNY)
Kevin Johnson cast a ballot for Barack Obama knowing he was likely casting away thousands of his own tax dollars.
The 31-year-old radiologist believes the price is worth a stronger America.
Its a shared sacrifice and a shared responsibility, said Johnson, a Manhattan resident and a member of the 3,200-strong Doctors for Obama group. Im fully aware of what it will cost me, but this much is expected of us.
While the vast majority of working Americans would see tax relief under President-elect Obamas plan, 5 percent individuals earning more than $200,000 and households earning more than $250,000 would see a significant hike. If Obamas proposal becomes reality, taxes for the top two income tiers would rise from 33 percent and 35 percent to 36 percent and 39.6 percent.
Still, Obamas appeal has resounded with the well-off. Americans in the $200,000-plus bracket voted for the nations first black president over John McCain 52 percent to 46 percent, according to CNN. Celebrities, including Oprah Winfrey and Warren Buffett who would pay millions more in income taxes, turned out in droves to elect the Democrat. And support groups such as Young American Scientists for Obama and Investment Bankers for Obama popped up on the Internet.
The notion that at the national level rich people vote for Republicans because they cut their taxes, its just wrong, said Daniel Gross, an economics expert with Newsweek and Slate. For a lot of well-off people, theres a lot more to life than marginal tax rates and capital gains.In New York, all the biggest private equity and hedge fund people, like Bob Rubin, theyre always Democrats, Gross added.
Overwhelmingly liberal New York, with its higher cost of living and higher concentration of young professionals, probably will feel a bigger tax bite than the rest of the nation. Obama would raise the taxes of affluent New Yorkers by at least $16 billion during the next two years, resulting in a net state payout of $3 billion after his pledged credits and subsidies, according to the Manhattan Institute.
About 10.5 percent of the states taxpayers earned more than $200,000 in 2006, compared to the 5 percent national rate, according to the Internal Revenue Service.
The upper-middle class in New York isnt worried about taxes because there are so many other things promised by Obama, said Grand New Party co-author Reihan Salam, who warns Obama supporters may not be as happy with the circumstantial alternative minimum tax.
Republicans were stupid to just talk about taxes all the time, Salam said.
Health care, abortion rights, stem cell research, gay rights and climate control were among the issues that attracted voters to Obama.
This is a good time to look at the bigger picture, said Allan Kessel, a 39-year-old Brooklyn doctor who admitted some colleagues were deterred by Obamas tax plan. If there were no major, major extraneous issues, we would have a lot more upper-income people voting based on their economic self-interest.
Manhattan attorney Steven Newmark said he kept the faltering economy in mind when he and Young Lawyers for Obama helped to raise more than $1.4 million for the president-elects campaign.
Perhaps one of the reasons Barack won is because so few people do meet that description of an affluent American, argued 31-year-old Newmark. A persons wealth is not just measured in how much they pay in taxes, there are always other issues involved.
If he does nothing else, I believe President Obama will restore competence to government and hopefully restore confidence in government, and that alone is an important achievement, Newmark said.
High hopes and expectations for the Obama administration overshadow the tax issue, Johnson echoed. Hes come up with a system thats more palatable to Republicans and to Democrats something that we can all rally around, he said. This is a new and refreshing way to govern.