Happy Labor Day!

As you pause to celebrate Labor Day, you might be interested to know where so much of the fruit of your labor goes in New York City. It goes to taxes, of course. But exactly how much? And which kinds of taxes? 

With a lawsuit and a major campaign under way to reform the city’s lopsided property tax system, the nice people at the city’s Independent Budget Office have prepared a snapshot history of the city’s tax mix since 1929. “Today,” the report states, “the city relies on personal income taxes, business income taxes, taxes related to real estate transactions, and a slew of targeted excise and other taxes, along with the more traditional property and sales taxes. But it was not always so.” 

The history is full of surprises. Here are a few: 

• At the start of the Great Depression in 1929, New York City relied on property taxes for 95 percent of its tax revenue. Life used to be so much worse. 

• In 1935, New York City became the first U.S. municipality to enact a general sales tax. By the early 1960s, the sales tax generated around a fifth of total city tax revenue, with a peak share of 23.9 percent in 1953. 

• In 1967, New York City established a personal income tax. The real property tax share of total city tax revenue fell below 60 percent. 

• Rates on income and real-estate related taxes were increased in the 1970s and collections were buoyed by economic growth in the 1980s. The property tax share of city tax revenue dropped below 50 percent in 1979 and dipped under 40 percent for the first time in 1987. Over the next two decades, the property tax share ebbed when the city economy was strong and rose when the economy was weak. 

• In 2007, the year before the most recent financial collapse, the property tax accounted for its lowest-ever share of city tax revenue (34.5 percent), while the shares of business income taxes (18.6 percent) and real estate-related taxes – the mortgage-recording, property-transfer, and commercial-rent taxes – hit all-time highs (together 10.3 percent). 

• In contrast to earlier periods, the property tax share has been rising over the current economic expansion. By 2017, the property tax accounted for 44.9 percent of total city tax revenue, the highest proportion in a quarter of a century. 

Which is to say, don’t expect the looming fight over property-tax reform to be pretty. Meanwhile, enjoy Labor Day.