I haven’t done this since 2009, so lets take a look and see how federal, state and local government tax collectors would treat two prototypical fictional New York City couples, the Senior Voters, and the Young Hopefuls, today. In the past I showed that the Young Hopefuls would pay vastly higher taxes in New York on incomes identical to the Senior Voters, despite being much poorer in wealth, and in employer-provided and public benefits, as well. In this example I make the Senior Voters two former NYC school teachers who retired at age 55 in 2008 after the Bloomberg/Spitzer/UFT pension deal that year.
Currently age 61, they own a house in Windsor Terrace and have a pension and investment income of $132,500, plus retiree health insurance. Social Security and Medicare will also be received starting at age 65. The Young Hopefuls, meanwhile, have an income of $80,000 per year. They are now age 35, and Baby Hopeful is now age 9. The live in a one-bedroom apartment in an old tenement building on busy 4th Avenue (at 14th Street) in Gowanus, have no retirement plan other than (perhaps) Social Security at age 67 or (more likely) medical marijuana followed by legal assisted suicide. But they do have health insurance today, with some public assistance, thanks to Obamacare. That is a big change from my past analyses, and one way that public benefits and burdens have shifted slightly to less well off younger generations since I last did this analysis. So how much would these two fictional couples pay in taxes? And how much would be left for other things? Let’s fire up the TurboTax and find out.