Switcherooni
CB
Andrew Cuomo’s tax-the-rich plan has big promise for New York Governor has to hold spending line while hiking levies
http://www.facebook.com/home.php?ref=hp
NEW YORK DAILY NEWS
Tuesday, December 6 2011, 4:00 AM Gov. Cuomo must keep tax hikes small — and push for real pension and health reforms. Mike Groll/AP Gov. Cuomo must keep tax hikes small — and push for real pension and health reforms.
Gov. Cuomo hits home-run deal on taxes and spending
New York Legislature reaches deal on Gov. Andrew Cuomo’s proposal to create a ‘fair’ tax code
The tale of two Gov. Cuomos: Suddenly, he wants to tax the rich
Gov. Cuomo makes push to hike taxes on rich but cut them for middle class
Gov. Cuomo proposes plan to kickstart job creation in New York State
Gov. Cuomo must keep promise not to raise New York taxes
Gov. Cuomo displayed superb skills in persuading the Legislature in his first year to hold the line on spending and taxes in the face of a $10 billion budget gap. He’ll now have to rise to those same heights as he seeks to, um, amend his no-new-taxes pledge.
There is a case to be made that the time has come to raise the permanent income tax rate for the wealthiest New Yorkers, as Cuomo now hopes to do regardless of his many adamant statements to the contrary.
Legislative Democrats, and many a Republican, are eagerly sold on hiking levies at the top in order not only to avoid the hard choices presented by falling revenue, but also to boost spending in general. Gubernatorial leadership would be crucial to prevent such knee-jerk mindlessness from prevailing.
Standing firm on spending — and seeking long-term reforms — while adjusting the tax code will be a larger challenge for Cuomo than explaining his night-and-day shift on high-end taxes to the public. Steadfastness will also be crucial to his oft-stated goal of reducing overweight state and local governments.
Cuomo’s tax vow had to do with the misnamed temporary millionaire’s tax. This three-year surcharge boosted the rate paid by taxpayers earning $200,000 and above and is scheduled to expire at the year’s end.
As candidate and governor, Cuomo said letting the tax expire was important to the state’s economic vitality. But then revenue fell, a deficit of more than $3 billion opened in next year’s budget, and he rethought his declarations.
Generally speaking, he would let the surcharge lapse and then establish a top-bracket rate that is lower than the surcharge was (allowing him to tell the rich they will pay less) but higher than the previous permanent rate for the wealthy (allowing him to bring in billions more in revenue).
Cuomo would put the new money toward closing the deficit and lowering taxes for the middle class, about which no one will voice objection.
That said, the governor has yet to get specific about any numbers. So it’s impossible to pass judgment on the wisdom of a plan that could have great appeal for both fairness and fiscal stability.
For the moment, only the guiding principles can be stated.
Cuomo must hold tax hikes to the minimum necessary to balance the books.
Cuomo must deliver a budget that is as close to zero growth as possible — and cannot exceed the 2% increase he has told localities to live by under his tax cap.
Cuomo must lead the Legislature, which would be thrilled with his tax plan, into enacting dramatic pension and health benefit reforms that would push New York toward far more affordable and realistic government costs.
This could be a crossroads at which Cuomo, through smart leadership, can achieve an all-around winner of a grand bargain.