Public Employee Press

State tax deal
Little help for working people

By ALFREDO ALVARADO

Gov. Andrew Cuomo and the State Legislature swiftly enacted a package of tax changes in December that slightly lowered taxes on the middle class and raised rates on incomes over $1 million.

Combined with the Dec. 31 expiration of the previous surcharge on high incomes, the new tax plan is projected to generate $2 billion in revenue for the state, less than half of the $5 billion that the surcharge produced. Despite serious budget gaps and cuts in funding for education and health care, the governor and New York City Mayor Michael Bloomberg both supported ending the surcharge - which was called a millionaires' tax.

The lowered tax rates will produce very little real tax relief for working New Yorkers, said Ron Deutsch of the New Yorkers for Fiscal Fairness coalition. "The average New Yorker will see about a $45 a year tax cut," he said.

With the revised tax brackets, New Yorkers making between $40,000 and $150,000 will pay a personal income tax of 6.45 percent, down from the previous 6.85%. Those making between $150,000 and $300,000 will now pay a rate of 6.65 percent, reduced from 6.85 percent.

Wealthy New Yorkers will pay 8.82 percent, less than they were paying last year with the surcharge.

The loss of state income from the surcharge means that the plan "doesn't generate the kind of revenue we need to address the major problems we face," Deutsch concluded.

"Our unjust tax system is widening the gap between rich and poor," said DC 37 Executive Director Lillian Roberts.

DC 37 and other unions and several members of the City Council fought to continue the millionaire's tax and have also supported the renewal of the stock transfer and commuter taxes to help raise revenue to cover the projected $2 billion budget deficit.

New York State has the greatest income inequality of any state in the nation. The wealthiest 1 percent of New Yorkers now get 35 percent of all the state's income, up from 10 percent in 1990.

DC 37 has also supported corporate tax reform to close the loopholes corporations use to avoid paying their fair share of taxes. "Business income taxes have fallen sharply relative to the size of the New York economy," said James Parrott, deputy director and chief economist of the Fiscal Policy Institute. "If the business share went back to where it was 25 years ago, state revenues would be $3 billion higher."

Thousands for the rich, peanuts for the 99%
Income	Actual Tax Cut
less than $40,000	$0
$50,000	$40
$70,000	$120
$90,000	$200
$150,000	$440
$300,000	$1,500
$1,000,000	$22,000
SOURCE: Kevin McCoy, CPA, Marvin and Company, Albany, NY