I find it hard to believe that the amount of tax fraud in NY is enough to throw this figure off. Even if what you're describing is true, it would hardly be "the actual problem" here.
Every job I ever had in high school was paid under the table, and this is true for my family members as well. It's also normal to not pay sales tax in the city at smaller cafes and every bodega; this is normally passed off as a "cash discount," but it's conspicuously 8.875% rather than the normal credit processing fee.
All that being said: this doesn't necessarily contradict the claim that large numbers of New Yorkers aren't making a living wage. Under-the-table agreements enable wage suppression/theft and make it more difficult for the city to use its labor laws to protect workers.
I remember being absolutely shocked when I went to a super duper hole in the wall place in Dallas that I was _sure_ was cash-only and discovered that they not only accepted cards, but their POS supported NFC!
For what it's worth, I live in NYC and have never experienced this. Lots of smaller places give cash discounts, but in my experience it's in the range of 3–4%, which sounds like a CC fee.
I wouldn't expect it to be the norm in areas where the foot traffic might pay credit cards by default; I think it's mostly in areas where cash business comes first anyways.
Edit: I wish people wouldn't downvote you. It's a massive city, and it's entirely possible to never experience this!
Sorry, I'm not meaning to say that people aren't getting paid enough. My phrasing choice of "actual problem" was poor. I'll leave it up so this thread makes sense.
My intended point was: if we want to understand whether peoples' lives are sustainable with their present wages in NYC, we should be measuring their actual wages, which is inclusive of this grey economy, unlike the reported data source.
The amount of "tax fraud" required to impact the figure is less than one might imagine, because the "living wage" standard is quite low.
I totally agree that NY has a significant (income:cost of living) problem.
My main objective was to draw attention to the difficulties in measuring the size and distribution of this problem, caused by the unmeasured informal economy and unbalanced access thereto.
I definitely don't think that the informal economy makes up for low reported wages, but it definitely is a ballast that we'd be better off understanding, given its scope and entrenchment.
(Bay Area rather than NYC though.)
Our au pair from Germany paid the same total tax rate on her entry level, non-university required office job back home as we paid on a mid six figure income in Maryland. That’s what makes their system work.
That's far from true. If we talk about percentage of income, the lower and middle classes subsidise everyone else. There are many legal ways to avoid (not evade, which is illegal) taxes if you have enough upfront capital and that is practiced by every big company and upper-class household regardless of location. There are also lots of ways through corruption, lobbying and under-the-table payments or other favours to unjustly enrich oneself at the expense of the taxpayer if you have the right connections.
European countries still "work" but that's more due to inertia and the system is starting to break down; the pandemic accelerated it and we're starting to see the first systemic failures such as the UK (well not technically Europe anymore, but the stage has been set long ago when they were still in the EU).
Short of a few outliers such as some Nordic countries that appear to have figured it out (at least for now), everyone else is in the same boat. Europe just enjoys more inertia but it's just a matter of time.
No. The top 1% pays a greater share of total taxes (state, local, and federal) than it’s share of total income: https://itep.org/who-pays-taxes-in-america-in-2019/
> Short of a few outliers such as some Nordic countries that appear to have figured it out (at least for now), everyone else is in the same boat.
Ironically, the Nordic countries shift more of the overall tax burden to the middle class than the US: https://taxfoundation.org/publications/how-scandinavian-coun...
In Norway, Sweden, and Denmark, the top tax rates kick in at just 1.3-1.6x the median income. They all rely heavily on VAT, which is regressive. All have low corporate tax rates, and apart from Denmark, they also have competitive capital gains tax rates.