November 19, 2013
Taxes and tax reform are likely to be a major topic in the next legislative session, which begins in seven weeks. Governor Cuomo is relying on two separate commissions for ideas about tax changes, while progressive groups and Republicans in the State Senate are also weighing in.
A coalition of progressive groups says the coming tax debate should focus on income inequality. Michael Kink, with Strong Economy for All, says New York has the largest gap between rich and poor in the nation with child poverty rates as high as 50% in many cities. And he says the groups will evaluate the ideas coming out of two tax commissions appointed by Governor Cuomo, as well as the state legislature, with this in mind.
“Every single proposal that the legislature considers can be judged through this lens, of whether it makes inequality better, or worse,” Kink said.
Ron Deutsch, with New Yorkers for Fiscal Fairness, says a Siena poll this week found that people in the state do care about tax cuts, and list that, as well as education, as chief priorities. He says the two are not mutually exclusive.
“We can have tax reform that addresses both of those issues,” Deutsch said.
The groups say in order to provide tax cuts for the middle and working classes, the wealthy and corporations need to pay more and some of that money should be used to help the state’s schools.
They also recommend stricter rules for economic development awards for businesses, and a circuit breaker type of property tax break that targets relief to lower income families.
The groups say they are encouraged by New York City Mayor elect Bill de Blasio’ s recent campaign, which focused on alleviating income inequality. de Blasio wants a higher tax rate for New Yorker’s making over $500,000 a year. He’d use the money to pay for pre -kindergarten programs.
Governor Cuomo says he wants tax cuts in 2014, the year he faces re-election.
“I believe we’re going to have revenue at the end of this year that we can be talking about a tax cut next year,” Cuomo said recently. “I think that’s very exciting.”
Cuomo has said he thinks he can work something out with the new Mayor. But he did not commit to raising taxes to fund more preschools.
Governor Cuomo is relying on two tax commissions for new ideas. The first, appointed two years ago, quietly released a report that recommends, among other things, eliminating the sales tax on clothing worth less than $110, and imposing a tax on digital services like I-tunes and Netflix.
Cuomo also appointed a tax commission led by former Governor George Pataki, a Republican, and former Democratic State Comptroller Carl McCall. They are charged with finding a way to reduce New York’s highest in the nation property taxes, and will report back shortly before the new legislative session begins.
Meanwhile, Republicans in the State Senate released their plan for tax reform. It includes reductions in the income tax for all levels of earners, a cut in the corporate tax rate, a faster phase out of an energy tax, and reduction in the estate tax.
Deutsch, with New Yorkers for Fiscal Fairness, says the progressive groups will target key Senators to try to get them to sign on to their plan for tax reform instead.
“The movement in New York City for income equality and fair taxation will spread all across the state,” he predicted.
They say they also hope to build alliances with parents around the state, who may not have a specific political ideology but are upset over school budget cuts and dissatisfaction over the implementation of the new Common Core standards.
New York has for several years imposed a tax surcharge on the wealthy. The current version continues until 2017.