A Little Tax Fairness During Tough Times
Hey New York, remember the economic boom? Profits were robust. Our local population of multimillionaires went up. Real estate values soared. And don’t get me started on those Wall Street bonuses. It’s a pity the party’s ending now, but those last few years we had some fantastic times, didn’t we?
Okay, a lot of blank looks. Maybe the good times weren’t quite so universal. Truth is, in 2006, with the boom in full swing, a fifth of the city’s population lived below the federal poverty threshold. Nearly half of the city’s poor families were headed by a working person who earned wages too low to lift their families out of poverty. And then the next fifth of the population was on the borderline of poverty, striving to earn a middle-class standard of living for their families. They largely missed the benefits of the boom, but it sure doesn’t look like they’re going to miss the bust.
There’s a lot the city and state should be doing to distribute the inevitable economic pain more fairly. We can prevent sharp service cuts, avoid transit fare increases that take a big bite out of dwindling paychecks, and – as I’ve argued again and again -- raise needed revenue from those who benefited most from the good years (which might never have been possible without public investments in an educated work force and an efficient transportation system) and who can most afford to pay.
But today, the Drum Major Institute is proposing an additional modest measure: eliminating city income taxes for households that the city and/or state have already deemed too low income to owe a cent. The measure will keep money (an average of $320 a year) in the hands of current and aspiring middle-class families who are likely to spend the cash quickly, boosting the city’s economy. These are the very folks who missed the boom years, but are feeling the pain of the downturn. Most of them are families with children. Many are single parents. We propose that this measure also be offset by a small income tax hike on city’s wealthiest residents.
We’re delighted that City Council Speaker Christine Quinn and Councilman David Yassky have adapted the proposal in their own tax plan. Since the measure would also require Albany's approval, we're also pleased that State Senator Liz Krueger has introduced legislation enabling the City to enact it.
This won’t solve the city’s economic crisis – not by a long shot. But it is a step toward fairness that comes at a time when New York families need it most.
UPDATE: See the City Council's press release on the proposal.