So much for transparency.
It”™s back to three men in a room to decide the future of this state.
A promise of no tax increases has vaporized in the ether.
Gov. Andrew Cuomo probably fancied himself to be the shining knight on the white steed last week when he announced plans to create jobs and cut taxes for the middle class of New York state.
But that steed might be of the Trojan horse breed.
“We are investing in projects that will restore our state”™s infrastructure and put thousands of people to work. We are cutting taxes on middle class New Yorkers and small businesses, which will inject nearly $1 billion into our economy. We are targeting new tax credits to hire inner city youth and reduce unemployment in some of the poorest areas of our state, as well as providing direct aid to communities struggling to recover in the wake of this year”™s severe storms.”
All this good cheer has to come with a price. Someone has to pay for it.
Hold onto your wallets those of you who have sweat blood and toiled long to achieve success; you probably know where he”™s going with this.
Yes, breaking his word on no new taxes, his plan will be carried on the backs of high-earners in Westchester, Nassau and New York City ”“ the region of the state most populated by those earning more than $2 million a year. These are the same people who are philanthropists in our communities, who help fund new wings on hospitals, who donate to the arts, to schools, sports programs, even the local animal shelters.
The wealthiest will be hit with a tax rate of 8.82 percent. However, the wealthy living in New York City would be hit with a 12 percent or so tax rate since the city has its own income tax. The biggest cut would go to those earning between $300,000 and $2 million a year. Those taxpayers would see their rates fall to 6.85 percent from the current surcharge or so-called “millionaires tax” that ranged as high as 8.97 percent.
The projected hike would net the state about $1.9 billion ”“ about half of next year”™s projected budget deficit. But that”™s a loss of about $2 billion from what was collected from the surcharge that sunsets at the end of the month.
The governor has proposed a New York Works Agenda that would create “tens of thousands of jobs through a $1 billion targeted and accelerated investment in key infrastructure projects around the state including roads, bridges, parks, energy and water projects.”
He also proposed a program to “provide immediate job training, job placement and tax credits for employers who hire, train and retain inner city youth.” The cost? A $25 million tax credit for eligible employers who, over the first six months of 2012, hire unemployed youth between the ages of 16 and 24. Maybe the Greyston Foundation in Yonkers could benefit from this plan; it”™s something they”™ve been doing for a long time.
The governor also proposed a $50 million grant program for businesses and counties impacted by Tropical Storms Irene and Lee. The plan also includes a job retention tax credit for businesses impacted by a natural disaster during the last year. The credit would be available to firms with at least 100 workers that have “retained or expanded their workers”™ roles during this time.” The credit would equal 6.85 percent of the wages of retained jobs and targets employers in financial services, manufacturing, software development, new media, scientific development, agriculture and other sectors. The cost? To be determined.
Cuomo also wants to cut taxes for corporate manufacturers. The cost? About $25 million.
Also to be reduced is the MTA payroll tax on small businesses. Private elementary and secondary schools, as well as parochial schools, would be exempt from the tax.
The cost? The governor said the MTA would be compensated $250 million from the state.
How will all this be paid with such major tax cuts? Perhaps we should just suspend disbelief.
The 800-pound Grinch in the room that everyone seems to be avoiding is spending.
Raising taxes is not the answer. Reeling in spending is the answer.
Perhaps the governor and legislators should reacquaint themselves with the recommendations made two years ago by a special panel that said consolidation was an excellent way to control costs.
The tax cuts for the middle class are fueling euphoria. But how long will it last? How long will it be before the millionaires from the financial capital of the world decide that enough is enough and leave New York City for tax-friendlier climes?
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