New York Is Broke but Cuomo Says, "Solidarity with the Millionaires"
New York State is Broke, but Governor Cuomo Joins GOP Push to Spare Wealthy
by Juan Gonzalez
New York Daily News
February 23, 2011
As many New Yorkers struggle to make ends meet and state and city budget deficits skyrocket, our rookie governor has a new, astonishing trick for his recovery plan - tax cuts for the wealthy.
That's right, Gov. Cuomo, the Democrat, wants to join all those Republicans in Albany and slash an income tax surcharge for every New Yorker making more than $200,000 a year - a mere 5% of the population.
We're not talking about a gross income of $200,000. This cut would be on taxable income above $200,000 - after the filer has taken advantage of every deduction and loophole IRS regulations allow.
The Legislature approved the surcharge, or so-called millionaire's tax, two years ago. It did so following the near economic collapse brought on by Wall Street greed. The temporary surcharge was meant to help the state weather the recession and is set to expire in December.
Since the tax was enacted, big banks, corporations and their investors have recovered and are flush with record profits.
Too many New Yorkers, on the other hand, still face unemployment, a persistent mortgage crisis, depressed property values, zooming health care costs and frozen wages.
As a result, state government is staring at a $10 billion shortfall for the budget year that begins April 1. Closing that gap will mean major cuts to education, Medicaid and other services. It will mean wage reductions or massive layoffs for thousands of government workers.
You'd think Cuomo and the Legislature would want to extend the surcharge until the economy has recovered. It would bring $1.2 billion in extra revenue between next January and March 31, and nearly $5 billion for the following fiscal year.
But like so many new governors across the land - including that guy Walker in Wisconsin - Cuomo is determined to make a national name for himself as a fiscal conservative.
Cuomo "wants to send a powerful signal to the world that New York is ready to do business and create jobs," Andrew Zambelli, counselor to the governor, said Tuesday.
In Cuomo's view, the wealthy have to be wooed with more tax breaks.
Nonsense, says James Parrott of the nonprofit Fiscal Policy Institute. They are doing better than ever.
"The top 1% of New Yorkers have seen their share of state income grow from 10% in 1980 to 35% in 2007," Parrott said. Meanwhile, income share has declined for the poor and stagnated for the middle class.
The rest of us know that instinctively.
That's why a recent Siena poll shows a majority of state residents favor keeping the millionaire's tax. If Cuomo and the Legislature do away with it, most New Yorkers - whether they make $40,000 or $40 million annually - will pay the same flat income tax rate of 6.85%.
President Obama and Congress have given the rich a windfall by extending the Bush-era federal tax cuts. Now Cuomo wants another tax break for our local millionaires on top of that.
Meanwhile, the governor rails against record budget deficits and asks the public and government workers to sacrifice.
[Thanks to Bill Koehnlein for forwarding this to Portside.]