|
That’s easy – that’s what governments do and anybody who runs for office and will not discuss their tax plans fully and specifically is lying by omission. We lay out the following proposals because the Green Party tells the truth. We do our best to tell you what we want to do, how we intend to do it, and how we’ll pay for it.
We believe that public goods are necessary to the General Welfare of New Yorkers and that the most wealthy New Yorkers - people who have enjoyed the overwhelming benefit of the tax-cutting of the past twenty years – should shoulder their fair share of the tax load. For too long, working people have paid a MUCH higher percentage of their income to taxes than do the very wealthy. And service cuts disproportionately affect working people. Today, New York State faces a major budget deficit of somewhere between $8-10 Billion. The Green party would bridge this gap with targeted taxes. Greater state-wide revenue could be used to reduce local property and sales taxes.
No Governor can implement a new system alone. What follows here are ideas that form the basis of our thinking on taxes. The Green Party offers these ideas as starting points for a full public discussion of how we raise and distribute revenue. NO other political party in New York will make any realistic tax proposals. Oh, sure, they’ll tell you that they’ll cut taxes – but you know that in the end, they won’t.
If Republicans AND Democrats (we call them the Republicrats since they agree about almost everything, especially that the other guy is more corrupt than they are) told the truth about fiscal policy, their common motto would be “Borrow from the rich, then tax the working stiff.” Republicrats prefer to “borrow and spend” because it allows them to spread money around without talking taxes . But sooner or later we have to pay back the debt, with interest, to the same rich folks who refused to pay their fair share in the first place. Then the politicians cry that there’s no money for programs that the people want and need. Yet there’s always enough to give a campaign contributor some tax credit or abatement. It’s a dirty game.
If you believe in Democracy, you must try to understand taxes, dry and confusing as they’ve been made to seem. They are, perhaps, the single most important function of government. Yet in New York State, that process takes place under cover of darkness, hidden from all public oversight. The staffs of three white men – the Governor, the Senate Majority Leader, and the Assembly Speaker, horse-trade their way to a budget. For the past eighteen years, they’ve produced that most important political document late – so late that many times a thousand-page tax bill is delivered to the desk of your elected representative a half-hour before the vote is taken, Under these circumstances, your elected representatives are no more than lobbyists and that is a shame.
And the simple truth is that we need taxes. We cannot have the public goods we need - clean air & water, parks and playgrounds, renewable non-polluting energy, public health (including single-payor insurance), mass transit, affordable housing, publicly financed day care, and high-quality, and tuition-free public education at all levels - unless we can pay for them. And the only fair way to pay for them is by fair taxation, apportioned according to people’s ability to pay.
The first step is to cut out corporate welfare. While executives of large corporations regularly threaten to leave this and other states if their taxes are not cut, we’ve learned that those concessions don’t really preserve jobs. And when they answer polling questions about what factors make a particular place attractive, those same executives consider good schools and other public amenities far more important than low taxes. In other words, public goods attract businesses that create jobs!
TAXES HAVE TO CHANGE
We have a very regressive tax system in New York because low and middle income wage earners pay a much higher percentage of their income in taxes than the wealthy. The same holds true for small businesses as compared to large, multistate corporations. We need to fix this. And we have a coherent plan for how taxes will be apportioned more fairly than they are now.
Most discussions about taxes centers around the income tax, which actually taxes ADJUSTED income, which includes deductions, tax credits & the rest of the complications that cost you so much preparation time (or money) every April 15. The income tax is mildly progressive and what passes for serious debate almost always concerns whether the tax rates will make the income tax a little more or a little less so. But that’s only a distraction.
Most of us pay more dollars into payroll taxes, a Federal flat tax on the first $80,400 of wages, than we do in income tax. Every dollar of every taxpayer’s income up to that level is taxed – no exceptions, no deductions, no tax credits apply - you never get ANY of it back in a refund. You pay that tax – to a max of roughly $7000 - as individuals, not as a household and you pay it on every job you hold. So if a couple holds two jobs, say, and each makes $50,000, they pay the payroll tax on the entire $100,000. But a single bread-winner with a half-million income doesn’t pay a cent in payroll tax on $419,600 – the amount OVER $80,400. Above that, the payroll tax disappears, so he pays the same amount in payroll taxes as someone who make $80,401. The MORE you make, the LOWER your rate. And if we put a tax of only 2% on income over $80,400, we’d raise somewhere between $4-8 billion AND CLOSE THE BUDGET GAP leaving money left for public goods!
GREEN PARTY’S NEW TAXES
1. NYS Emergency General Welfare Tax:
From the Constitution of the State of New York:
Article XVII - Social Welfare - section 1;
"The aid, care and support of the needy are public concerns and shall be provided by the state..."
Other "public concerns" enumerated in the NYS Constitution are health, education and housing for all residents of NYS. This and related sections are often referred to as the "General Welfare Provisions" of the NYS Constitution.
The NYSEGWT would be a 2% tax on ALL income, not just the Gross Adjusted Income that serves as the basis for the income tax, of NY residents above the payroll flat tax income limit of (presently) $80,400. This would raise approximately 4 billion dollars to address the "public concerns" mentioned above.
2. Stock Exchange Tax
During the New York City fiscal crisis of the mid-70’s, then-Mayor Ed Koch bargained away the Stock Transfer Tax for a payment in lieu of taxes – about $200 million per year. Many people would like to re-institute the tax, which would today bring in many times that amount,but given the new information-processing technologies, that solution is quite unmanageable. IIt would introduce a new and disruptive variable into each transaction and might actually drive stock transfers out of New York.
Instead, we propose to replace it with a tax on the market (asset) value of every corporation represented on the exchanges (NYSE, Amex and the NASDAQ) at a rate of 1/100 of 1% per year. It is a good tax in that it would rise with prosperity and subside in hard times. It would be easy to calculate and would in no way impair any transaction. It could be collected quarterly from the exchanges themselves. Whether they foot the bill, which they could well afford, or pass it on to their members and the listed corporations, which they will certainly try to do, is up to them. This would bring in about 2 billion dollars a year, even in the market's present somewhat depressed state.
3. Commuter Tax
The so called commuter tax should be reinstated as a general increase in the payroll tax, a portion of which would then be rebated to the employer for each employee who is a tax-paying resident of NYS. It would also be possible to rebate the tax to both the employer and the employee in equal parts.
4. Marijuana Reform Tax
An integral part of the Green Party platform is the decriminalization of all drugs, and specifically placing marijuana on the same legal footing as alcohol and tobacco. Taxes on alcohol and tobacco together in NYS amounted to just under 1 billion dollars in 2000. While marijuana grown for individual use would not be taxed, all sales would be. This might be expected to bring in several hundred million dollars per year, but since there are no reliable figures on marijuana consumption the tax revenue is difficult to estimate. But any increase in income is welcome and we will save a lot of money by relieving police, district attorneys, the court system, and the corrections system of the duty of arresting, trying, sentencing and incarcerating non-violent marijuana users.
Other drugs should be considered as health problems, not sources of revenue. However the revenue advantages of decriminalization would be considerable as treatment is a lot cheaper, and more humane, than incarceration.
At present tobacco is much more heavily taxed than alcohol. It is possible that it would be better to tax alcohol more, and tobacco less. The recent draconian increase in tobacco taxes (in NYC) might well dissuade the young from using tobacco at all, or at least postpone that use, both of which are laudable aims. But if taxation is carried too far, and that may already be the case, it will make criminal activity much more profitable (smuggling and tax evasion) and place an excessive burden on those, and there are many, who are already hopelessly addicted, a burden often shared by their families. This is a complex problem and should be carefully considered.
5. Motor Vehicle Environmental Tax
An important goal of any future administration should be the creation of a modern, environmentally sound, inexpensive, and energy efficient mass transportation system on a statewide basis. This would mainly entail expanding, and modernizing existing systems within cities and providing fast, comfortable transportation between cities.
In some parts of New York State automobiles would continue to be a necessity, but as a new mass transportation system is developed automobiles would become less and less a necessity and more of a luxury in most urban and suburban areas.
Again, as with the commuter tax, a generally high level of taxation, especially for unnecessarily large and/or fuel inefficient vehicles, must be balanced in recognition that some people need such vehicles. We will deal with those specialized situations with rebates or subsidies, but we will use technological monitoring to tax irresponsible use.
Traffic calming has been very successful in Europe. It is very difficult to implement here because of our tort laws. However with electronic monitoring and appropriate taxation, the same effect could be achieved. Traffic calming reduces noise, fuel consumption and pollution, makes driving safer and, at the same time, allows traffic to move faster. Also driving could be taxed according to time and locality of use. You can drive in midtown Manhattan at lunchtime if you wish, but the bus, or subway, or even a cab, would be much, much cheaper.
PROPERTY TAXES
First and most important, school funding should be completely divorced from local property taxes. That system made sense two hundred years ago but it is now outdated, discriminatory and killing the prospects of millions of urban and rural schoolchildren.
Property taxes at present account for only 17% of the NYC tax base. A gradual transition to taxation based on full value assessment should raise that to 50% of a greatly expanded tax base, one sufficient for the real needs of the city. This would require taking many parcels of highly-valuable land off the tax-exempt rolls. Land used for legitimate tax-exempt purposes – schools and religious institutions – should remain exempt, but investment property owned by tax-exempt organizations should shoulder part of the tax burden.
SALES TAX
A modest state-wide integrated sales tax should raise a huge amount of revenue. New York currently levies a 4% impost on sales (exempting most food, clothes priced below $110, and all stocks, bonds, and other securities that really rich people buy and sell a lot of). But NYS depends heavily on the income tax, putting NYS in direct competition for highly taxed residents with states, such as Florida and Texas, that have no state income tax.
Sales taxes are usually decried by the left as regressive and by the right as confiscatory - a very odd agreement. If however sales taxes are used to make possible the negative taxes - such as a universal minimum income for every NYS resident and family assistance payments for those who take care of children - that are part of the Green program,it is hard to argue that they are regressive,
Any really effective sales tax should be structured as a VAT tax, and the question here is whether or not the VAT tax could, or should, be implemented by NYS, that is, at a state and not the federal level; a VAT system FORCES businesses to keep real books and that itself is worth exploring.
A FINAL WORD (BEYOND NEW YORK)
Our governments create money, but allow the banks to issue it. Governments then borrow back the same money that the government itself created. It is the interest on this money, paid to individuals and corporations, that constitutes what we call, for want of a better name, the Unearned Income Tax Credit (or UITC).
The UITC is part of the tax system and should be included, just as the EITC and payroll taxes are, in any estimate of progressivity of the tax system as a whole.
The EITC, paid to poor working families, amounted to 5 billion dollars in 2000. The UITC paid to the top tier of wealth holders amounted to about 40 times that, or about 200 billion dollars. As Everett Dirksen said, that's real money. In fact it is equal to the TOTAL FEI of the entire bottom quintile of the population.
Wihen you use standard categories of analysis, economists claim that our tax system is mildly progressive. When the UITC is included in the calculations, however, our tax system is quite strongly regressive. No wonder so lttle has changed since 1848!
And the solution is simple; get rid of the UITC, the grand-daddy of corporate welfare. Over the course of five or ten years the Treasury should create, and issue, enough currency to extinguish that part of the national debt held by individuals and corporations.
The argument will be that this would cause inflation! But here is the great difference between the traditional monetary systems, those in which money is not created by government (though they did need to get their hands on it), and our present system in which money is the creation of government. The main function of taxation, now, is not to collect revenue, but to control the money supply.
In the 1790's Alexander Hamilton expressed himself very clearly, as usual, about the purpose of a large national debt - to create a prosperous and secure aristocracy. Maybe it’s time to shake that security a bit.
SOURCES =======
THE CONSTITUTION OF THE STATE OF NEW YORK as revised, with Amendments Adopted by the Constitutional Convention of 1938 and Approved by vote of the People on November 8, 1938. As Amended and in Force January 1, 2002
Edward Kellogg, LABOR AND OTHER CAPITAL - THE RIGHTS OF EACH SECURED and THE WRONGS OF BOTH ERADICATED, New York, 1849
Julie-Anne Cronin, U.S.TREASURY DISTRIBUTIONAL ANALYSIS METHODOLOGY, Office of Tax Analysis, U.S. Department of the Treasury, OTA Paper 85, September 1999
2001 NEW YORK STATE STATISTICAL YEARBOOK, The Nelson A. Rockerfeller Institute of Government, Albany, 2002
|
