Taxing The Rich Debated at Capitol
The issue of whether to tax the wealthiest New Yorkers at a higher rate is once again a topic at the State Capitol. Assembly Democrats are out with a tax plan that would redistribute some tax revenue from the richest to the poorest New Yorkers.
The Assembly plan would make permanent a temporary tax surcharge on New Yorkers making more than a million dollars a year when it expires in 2017. Democrats would also add new, higher tax brackets for those who earn between one and five million dollars, between five and ten million dollar, and a rate at nearly 10% for those who make over ten million dollars a year.
Meanwhile, middle class tax payers would continue to see a small reduction in their taxes, implemented at the same time as the temporary tax surcharge on millionaires, and the state’s poorest workers would be eligible for a larger earned income tax credit.
Assembly Speaker Carl Heastie says his members want to see a fairer tax structure.
“For a long time this house has wanted to see a more progressive tax structure,” Heastie said.
And Speaker Heastie says there also needs to be more revenue generated to fund schools.
“The amount of money for education that the governor put in his budget is not enough,” Heastie said.
Governor Cuomo has proposed raising aid to schools by just under a billion dollars this year. That falls far short of what education advocates and the State Board of Regents say is necessary. They estimate closer to two billion dollars are needed.
The property tax also funds schools, but the state’s property tax cap, now in its fourth year, will result in a zero percent increase in local taxes this year. The tax cap is 2% or the rise in the consumer price index, whichever is less. The rate of inflation, based on a market basket of goods, is estimated to be 0.12% this year. That may be good news for property owners, but it squeezes schools who have costs that are rising far above the rate of inflation, says Michael Borges, with the New York State Association of School Business Officials.
“Our major expense drivers are wages, pensions, health care and special education costs,” Borges said. “ Those costs are not typically represented in the CPI.”
And he says poorer schools will suffer even more than wealthier ones. So- called high needs schools will be able to raise a maximum of $10 more per public, while wealthy or low needs schools can raise up to $27 per student, under the cap.
Speaker Heastie says Assembly Democrat’s would like a straight 2% per year tax cap but he says it’s a non starter with Governor Cuomo and Senate Republicans.
Republicans who control the State Senate also are rejecting the Assembly’s income tax plan , saying they don’t support raising any taxes at all on “hardworking New Yorkers”.
Governor Cuomo has not directly responded to the Assembly plan. The governor has spent parts of the past three weeks at the Capitol during the busy legislative session, but has made no public appearances. A spokesman, when asked for a comment, referred back to remarks that the governor made nearly a month ago, on January 8th,where Cuomo was non committal.
“I’m thinking about this year this year and then I’ll think about next year next year,” Cuomo said. “And I’ll think about the year after next year the year after next year.”
Speaker Heastie says he’s not worried by the governor’s lack of response. He says Cuomo has changed his mind on key issues before.
“Last year, the governor said it was good to dream, when we talked about the minimum wages,” Heastie said. “So let’s see what happens this year.”
Last spring, Governor Cuomo was not a supporter of the push to raise the minimum wage to $15 an hour, and he cast doubt on its success. Since then, the governor has acted administratively to phase in the wage increase for fast food and state workers, and is pressing for a bill to enact a $15 minimum wage statewide.