All the overseas employees working in NYC are not taxed. To create equity amongst employees, US employees get their salaries bumped up to make their offers appear tax-free. So if your salary is $90K, and you are American, they give you enough money to make it $90K after-tax. Since there are a lot of factors involved in this (examples: spousal income and if you have a mortgage deduction) it's not as simple as reversing the marginal tax rates.