Anti-tax groups are criticizing Albany’s tax and business climate as Gov. Andrew Cuomo proclaims in statewide tours and a national TV ad campaign that a “new New York” is once again “open for business.”
The libertarian Cato Institute in its annual Fiscal Report Card gave Cuomo a “D” on Tuesday for tax and spending policies over the past two years. Meanwhile, the national Tax Foundation ranked New York 49th in its business tax climate index, and projected New York would have the worst business tax climate in 2013.
“The findings of The Tax Foundation’s latest business tax climate report clearly show that we have a long way to go before we can say that we’re ‘open for business,’” said Brian Sampson, executive director of Unshackle Upstate.
But Cuomo spokesman Matthew Wing said the administration has made great strides against historically high taxes.
“When he took office, Governor Cuomo recognized that taxes on New York’s residents and businesses were far too high, which is why he enacted the state’s first-ever property tax cap, established the lowest tax rate for the middle class in 58 years, and brought state spending under control,” Wing said.
The Tax Foundation ranking for New York considered comparisons of corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes and property taxes for homes and businesses. New Jersey was ranked 50th, while Connecticut was 40th. The foundation declared May 1 “tax freedom day” in New York, the day of the year a New Yorker must work to just to pay off all of his or her taxes.
Cato’s report card, issued every two years, is based on per capita spending as well as personal and corporate income tax rates, the state sales tax and the cigarette tax, which in New York is the highest in the nation.
“In his January 2011 State of the State address, Governor Cuomo said that New York must ‘hold the line on taxes now and reduce taxes in the future.’ Unfortunately, the governor has not lived up to that pledge,” the Cato report stated.
It cites the December special session in which Cuomo and the Senate’s Republican majority reversed their 2010 campaign promises to block a millionaire’s tax as a job killer. In mid-December, Cuomo and the Legislature increased the income tax for the wealthiest New Yorkers to raise $1.9 billion.
Part of it provided modest but rare cuts for middle-class families of $200 to about $400. The tax replaced a higher, emergency millionaire tax, which was to expire Dec. 31.
Cuomo and the Senate GOP refer to the tax increase as a tax cut, which lowered middle-class tax rates to the lowest level in 58 years. They also have said the 2012-13 state budget was adopted without tax increases because the tax increase that balanced the budget was done separately.
“Cuomo’s tax plan included some tax breaks, but the overall net tax increase was more than $1.5 billion a year,” Cato stated. “These tax hikes won’t help the New York economy.”
Wing said the 2 percent cap on the growth of local government and school property taxes will save a typical homeowner $2,300 a year and other tax breaks include the curbing of the Metropolitan Transportation Authority payroll tax. He also said the December tax rate changes make the middle-class tax rate is the lowest since 1953.
E.J. McMahon of the fiscally conservative Manhattan Institute wrote last month that the statement is “very strictly speaking … accurate,” but because of changes in the tax code since the 1950s “that comparison is also essentially meaningless, if not downright misleading.”
But several groups expressed support Tuesday for Cuomo.
“The property tax cap adopted last year, and this year’s pension reform, will produce benefits over time,” said state Business Council CEO Heather Briccetti.
The Partnership for New York City’s Katherine Wylde also issued a statement in support of the governor. Of the tax climate, she said: “No one has done more to change that than Governor Andrew Cuomo.”
Wylde and Briccetti are part of the lobbying group, the Committee to Save New York, that participates in the TV ad campaign.
Copyright 2012 The Associated Press.