Hope on State Taxes
I’ve said it before and I’ll say it again: some of the nation’s most respected economists make the point that budget cuts will harm state economies more than raising income taxes on the wealthy. But for the most part, state governments aren’t listening. Instead, they’re imposing public service cuts on residents who are already hard-hit by the economic downturn. They’re raising fees, transit fares, college tuition and sales taxes. The one thing they’re not doing is looking to those who benefited most from the recent economic expansion to contribute to the public good.
Some state legislators and governors may be buying into the Right’s anti-tax rhetoric. Others may have found it politically problematic to hike taxes on the folks they hope to get campaign contributions from. In any case, the results are the same.
The good news is that New York may be bucking the trend. On Tuesday, a group of New York State Senators introduced a bill to help close the state’s cavernous budget gap by raising income taxes on the wealthiest state residents. While budget cuts will still be necessary, the plan provides a meaningful balance between burdens borne by the wealthy and the sacrifices other New Yorkers are already making. As State Senator Eric Schneiderman points out “the richest 1% of New Yorkers pay 6.5% of their total income in state and local taxes while the poorest 20% of New Yorkers pay 12.6% of their income. Fair Share Tax Reform would return fairness to our tax system while cutting our State’s budget deficit in half, eliminating the need to make the most devastating cuts to our communities.”