PEP, March 2009: Time for tax justice

Legislators in Albany are facing growing pressure to address the state’s $13.7 billion budget shortfall by making the wealthy pay a fair share of the tax burden.

One New York, a coalition of community groups and unions, including DC 37, is calling for a tax increase on the rich that would bring in $6 billion in new revenue.

“As it now stands, the middle class and the poor would shoulder the pain of Governor Paterson’s budget,” said DC 37 Executive Director Lillian Roberts. “It’s unfair that the state’s wealthiest aren’t being asked to contribute their fair share.”

While opponents attack calls for hiking the tax on the wealthy as a socialist plot or the work of overzealous liberals, the coalition’s Fair Share New York Personal Income Tax Campaign would mark the beginning of an effort to reclaim the revenue the state has lost in decades of cutting taxes on the wealthiest New Yorkers.

Pay fair share
Over 15 years, the tax cuts tilted toward the rich have resulted in a loss of $20 billion in fiscal year 2008-09, said the Fiscal Policy Institute. In the past three decades, the state has reduced the taxes of the state’s top tier of taxpayers by 50 percent.

“The people who have benefited from tax cut after tax cut are not being asked to sacrifice at all,” said Dan Levitan of the Working Families Party, a member of the coalition. DC 37 members can protest state budget cuts and speak out for tax reform by joining a coalition rally at City Hall from 4 to 7 p.m. on March 5.

Gov. Paterson has opposed raising the income taxes of the wealthy. Instead he wants to balance the budget through deep cuts in funds for public schools, health care, public transportation and general municipal aid as well as over 130 new or increased taxes and fees. His plan would disproportionately hurt the working class and the poor and lead to fare and toll increases.

The Fair Share proposal calls for a 1.4 percent increase in the annual personal income tax of families earning more than $250,000, 2.12 percent for families earning over $500,000 and 3.45 percent for families with incomes of over $1 million. On Feb. 10, state Sen. Eric T. Schneiderman introduced a bill that mirrors the Fair Share plan.

“In the most recent economic cycle, from 2002 to 2009, virtually all of the benefit of the economic growth went to the top 5 percent of taxpayers with incomes of over $230,000,” said James Parrott, deputy director and chief economist of FPI. “The fair tax plan would ask the people who got all the income over those years to pay the new taxes.”

Assembly Speaker Sheldon Silver is calling for a “millionaire’s tax” that would raise $1 billion. Last year, the Assembly passed his proposal, but it died in the Senate, then controlled by the Republicans. Now that the Democrats have the majority of the Senate, supporters are hopeful the Legislature will approve some form of a tax hike on the rich.

— Gregory N. Heires