Taxing responsibly & investing fairly
The current fiscal crisis has its roots in the reckless tax policy that has been pursued over the past 30 years. In addition to reducing state revenues substantially through a series of multi-year, back-loaded tax cut packages, the state’s tax policy choices have resulted in a monumental tax shift—cutting taxes for the wealthy and subsequently shifting the burden on to localities to pay for public services through more regressive sales and property taxes. New Yorkers with the least income have the highest tax burden in the State. In addition, New York has the unenviable distinction of having the largest gap between the rich and the poor in the nation.
In 2009, the state legislature approved a budget with a temporary high end personal income tax (PIT) increase based largely on the Center for Working Families’ proposal. The proposal – a modest increase in the tax rate for the top 2% of earners in New York State – raised $3.64 billion in its first year, and is expected to generate $12.47 billion over three years. The Center provided an analysis of the impact of the PIT increase on all Assembly and Senate districts that made policymakers aware of the effects of cuts and PIT increases and the benefits of Fair Share Tax Reform in their respective districts.
Together with the Fiscal Policy Institute, the Center also supported a wide range of stakeholders with “Back on Track: Why Progressive Tax Reform is an Essential Part of New York’s Budget Solution,” a report published in March 2009.
More recentlythe Center released an easy-to-use fact sheet busting common millionaires tax myths along with partners from the 99 Coalition.
In the current Great Recession, New York’s budget gap again threatens to have drastically unequal impacts on low- and moderate-income residents. The portion of local services that’s funded by the state will shrink still further, and local property tax payers will shoulder an even heavier burden.
Meanwhile, a still-smaller set of earners than those touched by the temporary income tax — the 1.5% of New Yorkers who are very highly-paid financial industry employees — will take home massive bonuses amounting to more than twice the state’s $9 billion budget gap. These bonuses are drawn from the massive, blockbuster profits literally handed to the financial industry by the federal taxpayer-funded bank bailout and subsequent sweetheart lending policies.
To right the balance and bring real recovery to New York State, CWF and the Fiscal Policy Institute have developed a proposal for a temporary Bonus Recapture Tax that would net the state between $9.5 and $14 billion in revenue. The proposal includes a long-term revenue stream from closing major tax loopholes that hand hundreds of millions of tax dollars back to financial firms every year, in the form of tax rebates and exemptions.
CWF’s work on Fair Share will continue to evolve, as we work alongside New York’s strong progressive advocates to build a state that’s fair, builds workers’ assets and opportunities, and invests in communities for the long haul.