02 Nov 2006

The Cost of Big Government, New York-Style

, ,

Daniel Gross performs a little back-of-the-envelope analysis of just how much liberal big government adds to the cost of living in New York City.

Personally, I think his estimate is far too conservative. The housing differential is much, much higher than 14%.

A 2002 study by Michael H. Schill, then a professor at New York University Law School, concluded that a host of factors—regulations, zoning, unions, the building code—made the cost of building a home one-third higher in New York City than in 21 other cities. Nationwide, housing and shelter eat up 42 percent of a typical consumer’s disposable income. For a buyer to acquire New York housing that’s equivalent in quality to the same type elsewhere, he would have to use 56 percent of his disposable income. The New York dollar loses 14 cents: 86 cents.

An annual study by the city of Washington, D.C., compares tax burdens in large cities. A hypothetical family of four living on $150,000 in New York would pay the nation’s highest combination of sales, auto, income, and property taxes: about $22,635, or 15.1 percent of income. By comparison, the national median is $14,219, or 9.5 percent. That’s another $8,416 extra per year here, or another 5.6 cents. Our dollar is down to 80.4 cents.

The Bureau of Labor Statistics says overall prices here are 9.9 percent higher than the rest of the country. Remove the premium New Yorkers pay for housing and the currency is debased another 4.4 cents, to 76 cents.

But you can buy a dishwasher at 3:00 AM! And there’s home delivery Vietnamese!

Read the whole thing.

Hat tip to Frank Dobbs.


Please Leave a Comment!

Please note: Comments may be moderated. It may take a while for them to show on the page.

Entries (RSS)
Comments (RSS)
Feed Shark