"Meet the new boss-- same as the old boss."
-- Roger Daltrey (from The Who's "We Won't Get Fooled Again")
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In case you missed 'em, these two were on front pages of yesterday's Times and Poughkeepsie Journal:
"Cuomo Opens Campaign for New York Governor" by Danny Hakim and Nicholas Confessore
"Cuomo Says He'll Reform Albany As Governor" [Associated Press]
So-- kudos (Cuomo deserves 'em) for his comin' out strong now for needed progressive reforms like independent redistricting and ethics monitoring, disclosure of outside income for legislators, and same-sex marriage-- and making it easier for communities (if they want) to consolidate villages, etc...
[...and of course I'm all for strong Dem at top of ticket-- and new "sheriff of Wall Street" (like Spitzer; lol)...]
But-- wake up, progressives-- we need to raise ruckus NOW-- loudly against Cuomo's conservative and counterproductive plans that will hold NY back and prevent us from rebounding from its current funk...
First-- shame on Cuomo for taking so long to weigh in on the current state budget mess-- and now that he's done so, he's still barely saying anything-- no real solutions offered for this year-- only opposition to Ravitch current plan to borrow $6 billion over next three years to help balance state budget (with new financial review board)..."he declined to say much about current budget impasse bedeviling Albany"...
[recall massive coalition for sensible revenue alternatives @ http://www.ABetterChoiceforNY.org ; also see: http://www.fiscalpolicy.org/CWF_FPI_NewYorkHasTheWaysAndMeans.pdf (great FPI/CWF report)]
What I'm really alarmed about tho, frankly, is Cuomo's almost complete neoliberal capitulation to the NYTimes/Pok. Journal/Freeman/Daily News/punditocracy's consensus and right wing on economic issues-- "no new income taxes", "freezing state employee salaries", "capping state spending", and a "property tax cap"...(with no mention whatsoever as well of a pledge to enact Clean Money Clean Elections campaign finance reform-- as at least Spitzer/Paterson promised, tho failed to deliver on)...
[re: property tax cap-- crucial facts here: http://www.fiscalpolicy.org/PropertyTaxCapPressRelease.pdf ]
Sadly, Cuomo's neoliberal's proposals confirm the suspicions many of us had that, similar to Spitzer, and counter to his taking on Wall Street as AG, Cuomo is, unfortunately, unwilling to take on the true special interests and real power structure in our state-- not organizations who represent working people (unions who are outspent ten-to-one in Albany re: lobbying/donations)-- but Wall Street, corporations...
[looks like Andrew will be enacting massive budget cuts like Mario did in late 80's (after which NYS still lost 500,000 jobs-- in wake of Mario's slashing income taxes for corporations and rich then)-- just as Pataki did same thing from 1995-2006-- just as Spitzer and Paterson have done...new boss = old boss]
Too bad-- looks like Cuomo will very much need us to remind him that unless middle class is brought back to life in Hudson Valley and across NYS, there's no way our state's economy can come back...
[not that GOP would be any better on any of this, of course-- but we shouldn't settle for anything but best]
Recall facts from http://www.fiscalpolicy.org/RevisedFPIBudgetBook_20100203.pdf (Fiscal Policy Inst.):
[sadly, facts like these below ignored daily by local newspapers bent on promoting neoliberal agenda]
Fact: State spending now in New York as % of GDP is now about 6.9%; in 1994 it was higher-- 7.4%.
Fact: NYS now spends about $12 billion on employee wages/salaries-- less than 20 years ago in 1990.
Fact: Consumer spending accounts for two-thirds of GDP (Wall Street Journal), but high unemployment and high consumer debt burdens will temper consumer spending and restrain the pace of recovery.
Fact: According to the NYC Independent Budget Office, 73% of income growth in New York between 2002 and 2007 went to a small number of families at the top; the total income of the top 5 percent grew more than four times as fast as total income of the other 95 percent.
Fact: Millionaires now pay only 8.4% of their income in state/local taxes we in middle class pay 11%.
Fact: VT, CT, PA, NJ, MA all have higher monthly unemployment payments than NY; this hurts NY'ers.
Fact: To restore the state minimum wage to its July 1970 peak purchasing power, New York would have to increase its minimum wage to $9.46 by January 2013.
Fact: By 3-to-1 ratio NY'ers for stock transfer tax on Wall St.-- to stop local tax hikes, budget cuts.
[join 39 other local folks signed to http://www.petitiononline.com/stocktax ; http://www.FiscalPolicy.org ]
Fact: Wall Street made $61 billion in profits last year, besides $20 billion in cash bonuses (Crain's).
[see: http://www.crainsnewyork.com/article/20100328/FREE/303289966 ]
Fact: The richest 1% of Americans own more than 95% of us (according to Wall Street Journal).
[see http://www.commondreams.org/headlines06/1206-01.htm ; http://www.EuropesPromise.org ]
Fact: 98% of small business owners in the U.S. make less than $250,000/year (Wall Street Journal).
Fact: Millionaires used to pay 15.5% NY income tax rate in early 70's; they now pay less than 9%.
[see: http://www.fiscalpolicy.org/taxhistory2.htm ; http://www.ABetterChoiceforNY.org ]
I'll give this to Cuomo, tho-- he's right about one thing-- that the possibility for real reform still is with US:
[quote here below from Cuomo is from yesterday's Poughkeepsie Journal and today's Times]
"You go to the people first and you get the people on your side. You get the people supporting a specific set of reforms," Cuomo said. "We can say to the Democrats and the Republicans in January, 'The people of the state have spoken.' Politicians tend to follow what the people in their districts want done."
So-- what can you do about all this?...
First-- contact Cuomo's office at http://www.andrewcuomo.com/contact ; call 'em too: (212) 209-3314!...
Second-- call state legislators now in office on all this-- at (877) 255-9417-- and fwd this to all u know...
[pass it on]
p.s. Again-- just speaking personally as county legislator, REAL action needed to bring in extra added revenue to stop county property/sales tax hikes, budget cuts: http://www.PetitionOnline.com/SaveDuCo ;
see http://www.petitiononline.com/stocktax for full list of county budget cuts that WENT THRU in Dec.!...
p.p.s. Cuomo's plans won't help local schools struggling-- as he refuses to lift a finger to push for a truly fair and progressive system of taxation (e.g. as Cahill has; see http://www.PetitionOnline.com/FAIRTAX ) ...and let's not forget about those school budgets that went down Tues. in Arlington, City of Poughkeepsie, and Pawling-- despite big cuts that had been made in all three of those districts-- and
all of the budget cuts made by school boards locally already-- here in the Rhinebeck Central School District meaning cuts already made, eliminating $$$ for all field trips, intramural sports, after-school activity bus, Arts-in-Education, athletic supplies, and extracurricular clubs-- besides teachers...
p.p.p.s. And-- yep-- why dos Germany have all that $$$ to lend the rest of Europe?...because they didn't kill their middle class!...(German workers make up half the members of their corporations' boards of directors-- with full funding for schools, pensions, health care, child care, universities, good wages...see:
http://www.EuropesPromise.org ; http://www.democracynow.org/2010/2/12/europes_promise !...
[..and-- Greens, progressive Dems-- sign on to http://www.PetitionOnline.com/IRVnow for democracy...]
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From http://www.timesunion.com/AspStories/story.asp?storyID=920718 ...
Look to Wall Street for help
By FRANK MAURO AND RON DEUTSCH
First published in print in the Albany Times-Union: Monday, April 12, 2010
With New York, like other states, still reeling from a devastating national recession, Gov. David Paterson and the Legislature are proposing budget plans that rely overwhelmingly on cuts to essential public services. This, they imply, would hurt the economy less than a more balanced approach that includes some economically sensible revenue choices. Nothing could be further from economic reality.
The painful irony of the current crisis is that people's needs are rising while the resources available to the states to meet those needs are shrinking. Reacting to this situation by offering even less help to struggling families not only hurts people trying to get back on their feet, but it's also bad for the state's economy.
Several years ago, during a previous national recession, Nobel Prize winning economist Joseph Stiglitz and Peter Orszag, now director of the U.S. Office of Management and Budget, wrote a paper explaining why. They took into account the fact that most tax dollars that states collect go for salaries and purchases that are spent quickly and close to home -- the essence of economic stimulus.
Stiglitz and Orszag found that reducing this type of spending, especially when the economy already suffers from a faltering private sector, is actually more damaging in the short run than tax increases focused on the portions of higher income households' incomes that are the least likely to be spent in the local economy.
The budget cuts being proposed by the governor and Legislature would go in the other direction. These cuts would pull the rug from under many New York families. And just in the areas of education and health care alone, they would add 30,000 more New Yorkers to the unemployment rolls and threaten this fragile recovery.
Under a balanced approach to the state budget, revenues should be raised in ways that would hurt the economy the least; and should be used to reduce the extent of the spending cuts and to provide meaningful property tax relief.
While most families and businesses are struggling economically, Wall Street is enjoying record profits -- an estimated $61 billion last year. That's triple the previous record set in 2006 and it adds up to very generous salaries and bonuses, all on the heels of the recent trillion dollar, taxpayer-funded bailout. Wall Street bounced back quickly, but Main Street remains mired in the aftermath of the worst economic downturn since the Great Depression -- a crisis, by the way, caused in large part by finance sector excesses.
Wall Street could not have recovered so quickly without Main Street's helping hand.
Now it's time for Wall Street to return the favor and help Main Street.
There are several ways in which Wall Street could help prevent the most disastrous cuts to essential state and local public services that are now being considered by the Legislature.
For example, temporarily lowering from 100 percent to 80 percent the portion of the state's Stock Transfer Tax that is rebated would produce about $3.2 billion a year. In effect, this change would impose a tax of only one cent per share on shares selling for more than $20 each, and as little as a quarter of a cent per share for shares selling for less than $5 per share.
Another approach would involve a temporary moratorium on the ability of businesses to offset current profits with prior years' losses. This would ensure that profitable firms contribute on an "ability to pay" basis during the current downturn.
In a crisis like this, it's easy to forget about the future. Just getting through each day is tough enough. But New York can't afford to be so short-sighted. Education, affordable health care and housing, vital state services, a strong safety net and a sound transportation system are all essential for a prosperous economy. Cutting too deeply in those areas today will hurt the state. But a balanced approach that includes economically sensible revenue increases would be a sound investment that New York can't afford not to make.
Frank Mauro is executive director of the Fiscal Policy Institute. Ron Deutsch is executive director of New Yorkers for Fiscal Fairness.
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From http://www.fiscalpolicy.org/CWF_FPI_NewYorkHasTheWaysAndMeans.pdf ...
"April 2010: New York Has the Ways and Means: How and Why Wall Street Should Give Back"
This report was researched and written by Sunshine Ludder, a Senior Policy Organizer at the Center for
Working Families and James Parrott, FPI's Chief Economist and Deputy Director. Special thanks to Emmaia Gelman, Policy Director at CWF; David Palmer, Executive Director of CWF; Frank Mauro, Executive Director of FPI; David Dyssegaard Kallick, Senior Fellow at FPI; and Jo Brill,
Director of Communications at FPI.
The Solution: A four-part action plan
To address the current recession's challenges while moving New York toward a sensible long-term
balance between spending and revenues, a four-part action plan of temporary and permanent measures is needed.
I-Enact temporary tax measures that recapture some of Wall Street's profit windfall to spur Main
Given Wall Street's extraordinary 2009 profits underwritten in full by a taxpayer bailout, New York's
financial industry is well-positioned to help bring fiscal stability to the state, and tax relief and basic
fairness to working New Yorkers. Some mix of the following four options should be considered, with a
goal of raising $6 billion per year for two years.
Temporary bonus recapture tax. A modified version of the U.K. bonus tax, the New York
plan will levy a payroll tax on bonuses worth at least $50,000 and paid to employees
receiving total annual compensation of $250,000 or more. The tax should start at 25 percent
of eligible bonuses, and reach 50 percent when total compensation passes $500,000. The tax
is structured as a temporary tax on all bonus compensation, including deferred bonuses
whether paid as cash, stock, or stock options.
Temporary reduction of Stock Transfer Tax rebates. New York has had a stock transfer
tax on the books since 1905, but the state has returned it through an automatic 100 percent
rebate since 1981. Last year, the value of stock transfer rebates was $14.5 billion. Retaining
just 20 percent of the rebate would have generated revenue of $2.9 billion. A temporary
reduction of the rebate will not trigger an exodus of financial firms-and it will provide a
major source of revenue.
Suspension of the carry-forward provision for 2007 and 2008 net operating losses for
financial firms. This measure will suspend the ability of large firms to reduce their New
York corporate income tax liability on profits in 2009 or future years based on losses in 2007
or 2008. Those losses have been more than made up by 2009's record profits, thanks to the
taxpayer bailouts and low Federal Reserve interest rates.
Windfall profits tax. Wall Street's largest banks posted record profits in 2009-entirely as a
result of government economic policies and taxpayer resources. At the same time, Main
Street New York businesses are starved for capital, and still mired in the "Great Recession."
A one-time windfall tax should be levied on financial firms whose profits exceed a certain
threshold for 2009 and 2010.
II-Close loopholes and reform New York's tax system to make it fairer and more effective.
State tax loopholes and credits to big businesses, and financial firms in particular, siphon away hundreds of millions of dollars yearly, with very little return for taxpayers. New York should right the balance by reclaiming a fair share of taxes from business and reducing the tax burden on households. Under New York's state and local tax system, low- and middle-income families contribute greater shares of family income to support government services than wealthier taxpayers. Reforms to property taxes, personal income taxes and corporate taxes can make the system fairer and more productive.
The state's taxation of financial firms should be updated to respond to several changes in the
industry's structure and practices, and enact reforms that will generate ongoing annual revenues
of more than $300 million. The state should also seriously consider placing a temporary cap on
corporate tax credits, which have grown in recent years to a cost of $4.5 billion.
New York State should reform its personal income tax structure to increase the progressivity of
that tax on a permanent basis while providing the revenue necessary to reduce the pressure that is
currently placed on local property and sales tax bases, and to meet New York's pressing budget
needs on a recurring and sustainable basis.
III-Support federal action to counter the recession and modernize state corporate income taxation.
New York government, labor, business and civic leaders should work with their counterparts in other
states and at the national level to secure a much-needed extension of state fiscal relief; fund a robust job creation package; and repeal the federal law that prohibits states from drawing income tax from
corporations whose profits are based on New York sales but who do not have property or employees in
April 2010: New York Has the Ways and Means: How and Why Wall Street Should Give Back 5
IV-Give Main Street the help it needs.
The short-term revenues raised by the above recommendations should be used to help close the state's recession-driven budget gaps and to begin the phase-in of a meaningful and well-targeted property tax "circuit breaker."
The revenues from the permanent tax reforms and cost savings measures should be used to restore the
state's budget to structural balance while meeting the state's important service commitments and funding a property tax circuit breaker on an ongoing basis.
New York State's budget gaps should be closed in ways that foster fairness, sustained recovery and
broadly shared prosperity. In helping Main Street, it is essential that New York State keep the following
objectives at the top of its priority list in both the short run and the long run:
Restoring state aid to localities to reduce local tax burdens.
Funding essential services and programs in the state budget.
Investing in the state's physical infrastructure, including mass transportation, to create jobs and
put New York workers back to work while maintaining the foundation for a prosperous New
Three important facts about the bonus recapture tax:
#1: New York's financial firms won't move out of state.
The one-time bonus recapture tax will be collected as a payroll tax from the firms and banks paying out
the big bonuses. Large New York City firms and banks won't want to leave Manhattan or the
infrastructure they rely on here-and pay all the costs of moving their firms-just to avoid a one or two
year tax. As a payroll tax, the tax is collected from the firm regardless of where an employee lives.
#2: The UK taxes big bonuses, and London's financial industry is thriving.
The UK passed a one-time bonus payroll tax last December, aimed at London's financial center. Financial firms made a lot of noise, but none of them has left London. The Conservative Party candidate for prime minister recently proposed a permanent bank tax to fund a permanent tax break for married couples. The Financial Times quoted a Conservative official, "Nobody has claimed that [the already enacted bonus tax] has undermined the City's competitiveness."
Early reports suggest that bonuses have not been reduced in proportion to the UK bonus tax. The UK tax was initially expected to raise £550m, but estimates are now over £3 billion. The revenue outcome looks very strong, but as for the British government's stated goal of reducing the practice of high-flying bonus payments, it does not seem to have worked.
The UK's tax on bonus compensation is much steeper than what's proposed for New York: The UK tax
reaches all bonuses over £25,000 ($40,000) with a flat 50 percent. Early reports are that most UK firms
continued to pay bonuses heavily in cash even after the imposition of the tax-which should not be too
surprising, since the tax also reaches bonuses given as stock and other forms of deferred awards.
#3: A Bonus Recapture Tax will amount to less than 10 percent of Wall Street's 2009
A one-time tax on big bonuses will not jeopardize Wall Street firms, but it will provide critical revenue for what's really in jeopardy-New York's working families. The added $4.7-6.9 billion revenue from taxing super-bonuses will mean urgently needed property tax relief for New York's working families and urgently needed revenues to help close New York's deficit and get the state back on track to fiscal