Cruel Hoax

[dgriffin]

That painless tax bill is really a cruel hoax

Published 11/20/11


Before considering the latest eruption of support for something called a "circuit breaker," consider the following.

People who crunch numbers are worried that governments do not have the money to pay the pension promises they made. Even if younger workers agree to accept less, those already retired are living longer and those close to retirement keep hearing promises that their pensions will not be touched.

That's a long-term worry. Here's an immediate one from news stories this week. The amount that governments put away to pay those pensions is based on assumptions about how much the money will earn if invested wisely. Because money does not make the money it used to, governments will have to put more money in that pension bank. When they do that, it comes from the top of the pile leaving that much less for everything else.

Who has a lot of retired and soon-to-be retired workers? New York state government.

Then consider some other news of the week. From Albany have come several required reports on how much the state is taking in and how that compares to what it had estimated. While figures vary, they all come in bright shades of red. The revenue shortfall this year alone will be several hundred million dollars. Project ahead a few years, as required, and the red ink swells into the billions.

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Circuit breaker is best hope for New York state


By Gioia Shebar
Published: 11/25/11


In your editorial “That painless tax bill is really a cruel hoax,” let me suggest another editorial titled: “that tax bill is really a cruel hoax”.
The property tax is chaotic, unfair and is presently consuming 20 to 40 percent of middle-class family incomes. The circuit breaker has been vetted by such respectable entities as economists for good government groups, fiscal policy organizations, the League of Women Voters and tax policy experts and found to be the best and fairest form of relief to keep homeowners and renters – with family incomes up to 250,000 per annum- solvent.
Your critique is based on several wildly incorrect assumptions.
One is your assertion that local governments and school districts will spend “whatever they deem necessary” if people received relief. How is this even remotely possible with the tax levy cap in place?
Second is your acceptance – strangely amateurish for a paper that has probed the depths of Albany’s dissimulation in the past – that the state is hopelessly broke and can’t pick up its rightful share of the bill for public services that the circuit breaker requires. So not true!
Albany rebates $14 billion in stock transfer taxes to Wall Street each and every year.

Continue at:

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[clarencebunsen]

I still think the solution is to bring down expenditures; switching to take revenue from another pocket always seems to result in taking more revenue. However, I wouldn't count on any actual spending cuts happening.

I've never seenproperty taxes in the range of 20-40% of a middle class income but I wouldn't be surprised if there are examples.

Circuit breaker proposals seem like a back door way of making property taxes into income taxes. Why not be honest & replace property taxes with higher income tax rates.?

[dgriffin]

The following was sent to me by the people at the NYState Property Tax Reform group. Unfortunately, they didn't cite it well, so I can't say exactly where it appeared.

The interesting thread through it is "fairness of taxation." But it reads like a typical ruse when at the end of the day after taxpayers are told all will be fair in the future, everybody's taxes go up.


Cuomo lays out tax code plans on second op-ed

Posted on December 5, 2011 at 3:39 pm by Casey Seiler, Capitol bureau chief in Andrew Cuomo



Gov. Andrew Cuomo follows up Sunday’s release of a broad op-ed on his desire to see an infrastructure fund, inner-city youth jobs programs and more with one devoted to reworking the state’s tax code. The nut of his plans:

I would create multiple brackets and rates increasing on a graduated basis throughout and indexed to inflation. I would add more income brackets for the middle income and add high end brackets. The actual rate span should be several points from low to high.

Here it is:

New York needs to enact a bold, innovative economic plan and tax code reform to create jobs at this difficult time. To achieve that we will need bipartisan political cooperation and a plan the people of the State support.

I believe economic development, popular support, and political consensus must all be built on the same foundation: fundamental fairness.

Last year, when we were preparing the state budget, I exposed that the system was inherently biased against the taxpayer. The very definition of the State’s budget deficit included statutory annual increases for individualized programs marbleized through the State’s budget laws. In short, “deficit” meant the amount necessary to fund a 13 percent increase. The taxpayer didn’t have a chance.

Our current tax system is also unfair.

I have posed the following question to Albany veterans, befuddling almost all: at what income level does the State’s top personal income tax rate become effective? Answers range from about $100,000 to $1 million. Virtually no one guesses the correct answer: only $20,000 for an individual taxpayer; and only $40,000 for a two-earner family. So, in New York under the permanent tax code, an individual making a taxable income of only $20,000 pays the same marginal tax rate as an individual making $20 million. It’s just not fair. While New York’s earned income tax credit, child care credit, and high standard deduction help working poor families, New York has left the middle class with an undue burden which also hinders our economic recovery.

From a competitive point of view, New York’s tax system is behind. Other states and the federal government have an income tax code that is fairer than New York’s. Unlike New York, 22 states apply their highest rate to incomes higher than our $40,000 level. Also, unlike New York, where the range between its lowest rate (4%) and its highest rate (6.85%) is only 2.85%, 28 other states have larger ranges that reflect a fairer distribution of the tax burden. Even the federal system has more progressivity: a range of tax brackets that spans from 10% to 35%, and the top not kicking in until taxable income exceeds $379,000.

New York is the progressive capital of the nation yet there have been no real tax reform efforts in the state in decades, only periodic gimmicks. From 2003 to 2005, we added two new temporary surcharge brackets. In 2009 we enacted the “millionaire’s tax,” which expires at the end of this year. The millionaire’s tax purported to shift the tax burden to the super wealthy to alleviate the burden on the middle class. But it failed on both counts. It actually raised taxes on people who were making $200,000 – hardly “millionaires.” And it did absolutely nothing to lower the disproportionately high tax burden on middle class families, who continue to pay the same marginal rate whether they make $40,000 or $299,000 in taxable income.

We must reform our tax system to stimulate the economy and restore fundamental fairness.

First, we need to reform the code in a way that creates jobs and grows our economy. To do that, we need to put more money in New Yorkers pockets and inject it back in to the economy. There are also tax credits that can incentivize private sector job growth.

Second, true reform for fairness has two factors: income brackets that fairly group income levels and progressive rates increasing with income. Simply put, to me “fairness” dictates that the more you make the more you pay and the higher your income the higher your rate. Also, you should be treated the same as people with similar incomes and differently from people who make significantly more, or significantly less, than you earn. I would create multiple brackets and rates increasing on a graduated basis throughout and indexed to inflation. I would add more income brackets for the middle income and add high end brackets. The actual rate span should be several points from low to high.

Our State Legislature will need to act, swiftly and effectively.

I believe we can avoid partisan gridlock and make government work by forging a plan that is based on fundamental fairness rather than political ideology.

During these difficult times, New Yorkers will step up and do their part to create jobs and revive our economy – but the system must be fair for all. Our State deserves nothing less.

Governor Andrew M. Cuomo

[clarencebunsen]

Here is at least one place it appeared:
www.nydailynews.com/blogs/dailypolitics/2011/12/cuomo-calls-for-tax-fairness-in-new-op-ed-piece

This piece is so vague it's impossible to determine what he will actually propose. I wait with breathless anticipation to learn if New York will anoint me as one of the "rich" and how much the designation will cost me.

[dgriffin]

Dec 6, 2011 6:13:16 GMT -5 clarencebunsen said:

Here is at least one place it appeared:
www.nydailynews.com/blogs/dailypolitics/2011/12/cuomo-calls-for-tax-fairness-in-new-op-ed-piece

This piece is so vague it's impossible to determine what he will actually propose. I wait with breathless anticipation to learn if New York will anoint me as one of the "rich" and how much the designation will cost me.

Vague is an art form in Albany.

[corner]

he is his fathers son

[dgriffin]

Dec 6, 2011 12:31:39 GMT -5 corner said:

he is his fathers son

You got that right!