At the recent state of the state address, newly elected governor Andrew Cuomo outlined an emergency financial plan to curb the New York State debt crisis. One major component of the plan is a freeze on taxes, preventing increases in personal or corporate income tax. This plan fails to acknowledge that the current state tax structure is implicitly unfair—burdening the lowest earning families with the greatest share of their income towards local and state taxes. While families making between $16,000 and $33,000 pay 10% of their income to local and state taxes, families making over $633,000 pay only 7.2%. Part of this disparity can be attributed to the fact the consumer purchases subject to the regressive, universal sales tax make up a greater portion of expenditures among middle and lower income families than wealthier families.
In 2009, advocates won a temporary income tax surcharge that created two new progressive brackets for income taxes – 7.85% on income between $300K and $500K and 8.97% on income over $500K. Yet, this temporary change is set to expire in 2011, stopping the progressive income tax bracket at incomes over $300K. It is essential that these top rate brackets stay in place to more fairly distribute the tax burden. This new structure also generates a substantial amount of revenue ($3- $5 billion a year).
As of now, the top 1% of wage earners in New York State control 35% of the state’s income, leading the nation in income inequality. This is even more drastic in New York City, where the top 1% controls almost half of the city’s total income. This inequity is partially explained in the disproportionate emphasis on sales and income tax over taxes on business; in 2010, personal income taxes raised $34.8 billion; sales and excise taxes raised $12.2 billion; and corporate and business profits taxes raised only $6.6 billion.
Cuomo continues to pander to these top earning corporations, avoiding tax policies that could alleviate debt by targeting New Yorkers with money to spare. Taxes on bonuses or moving stocks could garner millions of dollars, but Cuomo’s fiscal agenda clearly aligns with the priorities of big business and disregards the unjust repercussions for New York’s poorest populations.
Another troubling element of Cuomo’s fiscals plan is a state spending cap. As seen in places like Colorado, such a cap results in detrimental repercussions for state funded programs like public education. Colorado dropped from 35th in the nation to 49th on K-12 spending after their implementation of a spending cap in 1992. A similar limitation on education spending, particularly for New York City, will inevitably hurt the quality and effectiveness of an already ailing public school system.
As is often the case in a time of financial crisis, politicians like Cuomo tighten budgets in ways that effect services for citizens the most in need while protecting the interests of those at the top. The implications of this new fiscal policy for New York are clearly slanted in favor of businesses and corporations comprised of the state’s wealthiest individuals, leaving many lower-income working New Yorkers unfairly burdened while public services like schools flounder.
-Cait Gillies, Resilience Advocacy Project
Source: New Yorkers for Fiscal Fairness, Ron Deutsch
For more information about Cuomo’s agenda and upcoming advocacy opportunities:
http://www.box.net/shared/fzh7ob5zqi
