Israel: Rich is Relative

Many of my colleagues in Washington say that the wealthiest people in America should pay the highest taxes, sharing most of the cost for our schools, roads, infrastructure, Medicare and Medicaid programs and veterans' healthcare. That seems fair. But few in Washington have been able to define exactly what salary makes a family "wealthy."

As we know all too well, Long Islanders pay for the privilege of calling Long Island home – in property taxes, school taxes,and the high cost of basic necessities like gas and groceries. In fact, a recent report has confirmed that Long Island is one of the most expensive regions in the country to raise a family. But the same salary that would make a family wealthy in low-cost areas, like Arkansas or Wyoming, might not even cover the basic costs of living on Long Island. Yet, both families would fall into the same tax bracket.

For example, last year a single filer earning between about $82,000 and $170,000 was in the 28 percent bracket. Now, $85,000 a year just doesn't go as far on Long Island as it does in other parts of the country. In fact, the self-sufficiency standard for Suffolk County– the amount that a family must earn to cover basic needs without government assistance – is $121,269. The self-sufficiency standard in Laramie, WY is $52,737 – nearly half of Suffolk County's.

This is why I've introduced the Tax Equity Act, legislation that would reform the Federal Tax Code to reflect regional differences in the cost of living. Under this proposal, the level at which a tax rate kicks in would be adjusted by how expensive an area is. The person making $85,000 and living on Long Island might now move from the 28 percent tax bracket to the 25 percent tax bracket, reducing their federal income tax burden.

It's no secret that "rich" is relative. The tax code should recognize that reality by indexing its brackets to account for differences in the regional cost of living.

Congressman Steve Israel represents New York's 2nd Congressional District, including Long Island communities in Huntington, Babylon, Islip, Smithtown and Oyster Bay. He was first sworn into Congress in 2001.