Michaud: 'High income' is not as much on Long Island

President Barack Obama speaks as Speaker of the

President Barack Obama speaks as Speaker of the House Rep. John Boehner looks on as the President meets with congressional leaders in the Cabinet Room of the White House. (Credit: Getty Images, 2011)

Anne Michaud

Portrait of Newsday editorial board member Anne Michaud Anne Michaud

Anne Michaud is the interactive editor for Newsday Opinion. She

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It seems likely that we will be hearing about the tortuous dramas of the "fiscal cliff" until the calendar closes on 2012. The president took his case to business leaders this week and will speak tomorrow to workers at a Pennsylvania toy factory, in an effort to ratchet up pressure on Republicans in Congress.

Meanwhile, House Speaker John Boehner (R-Ohio), is threatening to push the country into default unless there are drastic spending cuts. And so the wrestling match continues, teetering as close to the Jan. 1 "cliff" edge as possible.

Many Long Islanders, I suspect, will be watching how the debate settles over who is wealthy and who is middle class. President Barack Obama has drawn the line at earnings of $200,000 for an individual, and $250,000 for a household. He wants to extend tax cuts for everyone below those annual incomes.

However, this income cutoff is unfair to high-cost areas like Long Island, as some Democrats have acknowledged. In 2010, Sen. Charles Schumer (D-N.Y.) floated the idea of raising taxes only on $1-million-plus incomes. A year earlier, Rep. Steve Israel (D-Huntington) was one of eight co-sponsors of a bill, the Tax Equity Act, that would have adjusted federal income tax brackets to account for regional differences in the cost of living.

The bill was popular in the Northeast: Seven co-sponsors were from New York, and the eighth, Rep. Jim Himes, represents Fairfield County, Conn. But the bill went nowhere.

This year during election season, many more Democrats saw the light and began publicly questioning whether $250,000 was the right cutoff. House Minority Leader Nancy Pelosi, who represents pricey San Francisco, in May called for a vote to make the tax cuts permanent for anyone making less than $1 million a year. Florida Sen. Bill Nelson and North Dakota Sen.-elect Heidi Heitkamp also supported extending tax cuts for those making less than $1 million. Candidates from Missouri to Nevada to Virginia said $250,000 was perhaps too low. Some floated figures of $400,000 or $500,000 instead.

This campaign-trail flirtation with a compromise obligates Democrats to at least consider a higher-income cutoff.

There are two reasons this is important to Long Island -- and, indeed, to high-cost regions around the country. First, many Long Islanders would be affected by the higher tax rate. The IRS doesn't publish data for the $250,000 income level, but about 100,000 Long Island households made more than $200,000 in 2009, according to census figures.

People making $250,000 a year don't necessarily feel wealthy. Their household could consist of a teacher and a police officer -- in other words, middle class occupations. At that income, it's not always possible to fund what most Americans would agree is a middle-class life: the ability to save for retirement, afford a home and educate one's children.

More income taxes -- on top of high-priced homes, local taxes, transportation, recreation and education -- would make this area even less affordable. We are already bleeding retirees to North Carolina, and graduates to everywhere else.

To be sure, it may be hard to muster sympathy for a $250,000-earner when the median family income nationwide is $62,300. And bumping the cutoff from $250,000 to $1 million would lose the government $366 billion in revenue over 10 years, according to the nonpartisan Center for Budget and Policy Priorities.

But fairness dictates a second look for high-cost regions. For many people, another few thousand dollars in taxes just isn't affordable.