2021 is shaping up to become one of the most expensive years for taxes ever. It may only be eclipsed by higher taxes in 2022.
Long Islanders already work around six months of the year just to cover all of the taxes they pay. Tax freedom day in 2021 and 2022 could come much, much later in the year.
Here are just some of the likely taxes and tax hikes you’ll face if you live or own property on Long Island.
Higher Income Taxes
Our new president-elect ran a large part of his campaign on the promise of raising taxes and instituting dozens of new taxes. With the incredible record setting turnout this year, American voters seem to be so financially well off that they are rushing to give up more of their paychecks to the government. Newly proposed tax brackets have been floated all the way up to a 90% federal income tax on the wealthiest New Yorkers. That’s in addition to state income tax, and all the other taxes. While most may not fall into that bracket, the northeast is one of the highest wage earning parts of the country. Meaning most should brace for paying more income taxes and taking home less of their paycheck each month. Make sure you account for this in your budgeting. Some may need to set aside more money they would typically use on utilities and groceries or holiday spending to cover this new tax hike.
New Work From Home Tax
A new list of economic suggestions from Deutsche Bank includes levying an extra 5% tax on those working from home. The money would be given to others who can’t find work from home jobs. Employers could cover the cost of this tax. Though it is more likely they would reduce their workforce instead.
Investment Income Tax
In order to force more financial equality in America the new white house administration is expected to do away with preferential treatment for savings and retirement accounts, and begin taxing investment gains and income at the same (much higher) rate as earned income. This will have several substantial impacts. Among them are retirees having to figure out how to make up the double digits in additional taxes that will start coming out of their monthly incomes. Commercial real estate landlords and apartment owners will have to hike rents to account for these new tax rules.
It shouldn’t be a surprise if the healthcare insurance mandate is revived. The Obamacare provision which fines those who can’t afford health insurance when they file their income taxes. These fees could conceivably be far higher given the recent COVID mess and need for vaccines.
To combat the dire impacts on the economy and job losses stemming from the chaos of 2020 and the new taxes expected in 2021, expect more pressure to roll out a government run guaranteed income program. This money will have to come from somewhere. It will have to be funded by other new taxes to shift money from those still choosing to work to those who don’t.
Higher Property Taxes
With many other programs this administration and local extensions of it want to roll out, anticipate further increases in annual county property taxes from 2021-2023.