A discussion about tax reform has started in Albany which I am glad to see take shape. Members of the State Senate Finance Committee have been holding hearings and asking the question: how do we improve our state’s tax policy? They have begun to gather testimony from business groups and other experts in tax policy […]
A discussion about tax reform has started in Albany which I am glad to see take shape. Members of the State Senate Finance Committee have been holding hearings and asking the question: how do we improve our state’s tax policy? They have begun to gather testimony from business groups and other experts in tax policy in reaction to rankings that consistently rank New York’s tax burden as one of the highest in the country.
The fact that New York state has high taxes is hardly a surprise to anyone living in the state. According the Tax Foundation, a Washington think tank, there are several tax categories in which New York ranks either the highest or close to the top. Perhaps what illustrates this best is that New York’s Tax Freedom Day is May 1 — the second latest in the country. Tax Freedom Day illustrates how long citizens of a state must work into the year before they have earned enough money to pay all federal, state, and local taxes for the year. If this increases by two more months, it will take New Yorkers, on average, half the year to earn enough to pay their taxes.
Unfortunately, it does not end there. New York ranks number three in the nation as far as our state and local tax burden per capita. Our state and local sales tax rates rank seventh highest in the nation. We also have the highest gasoline tax rate and the third-highest state and local cell-phone tax rate. Perhaps if New York limited itself to just collecting revenue from a few sources like income tax and sales tax, these high rates wouldn’t be too bad. But on top of these high rates, New York also has, among others, a highway-use tax, motor-vehicle fees, cigarette and tobacco taxes, alcoholic-beverage tax, corporate-franchise tax, bank tax, insurance tax, utility tax, and the estate and gift tax.
From a political perspective, it is unlikely that one can wave a magic wand and make these taxes simply go away. However, if New York ever wants to again be the economic capital of the country, we must begin chipping away at our tremendous tax burden. As a member of the Assembly Ways and Means committee, I sponsor several pieces of legislation that will do just that. Individually, these bills won’t cause a severe shock to our state’s habit of taxing and spending (and therefore may be the most feasible to get passed), but on the aggregate they will go a long way in relieving the tax burden on taxpayers and improving New York’s business climate. The following are a few of the bills that I am sponsoring:
§ Let’s remove 18-A. This is an energy tax on utilities that is ultimately passed down to families and businesses. This is bad state policy and should have expired long before now, as it keeps us uncompetitive with other states for new businesses. (A.382)
§ Eliminate the Wage Theft Prevention Act. This is a costly and unnecessary mandate that cuts into businesses’ production and their bottom line. The name, Wage Theft Protection, sounds well-meaning but the law is duplicative and only serves to create a burden on employers who were already following the law. (A7756)
§ Encourage new business startups with the “BizBoom Program Act.” (A.4567) This would cut application fees for new businesses by 50 percent for the first year, and eliminate business income taxes for the first year, as well as reduce income tax rates for the second and third year.
§ Eliminate burdensome regulations by creating the “Division of Regulatory Review & Economic Growth” (or D-RREG). This would be led by a commissioner who has a fixed term, to review and make binding recommendations for the elimination of burdensome regulations and permit requirements. In talking with constituents and business owners, they often mention “red tape,” which can limit growth. (A.5044)
§ Work-NY, (A.4565), would reduce the state tax rate for all manufacturers by 50 percent. This legislation also would provide a personal income tax credit for small businesses with incomes below $250,000. Work-NY also would create a tax credit for new jobs. Each business that hires an unemployed person or a veteran also would receive an additional tax credit.
These pieces of legislation are just a start. My job is to convince my colleagues that we cannot continue with the status quo. We need to reverse New York’s high tax ways if we ever want to improve our economy.
William (Will) A. Barclay is the Republican representative of the 120th New York Assembly District, which encompasses most of Oswego County, including the cities of Oswego and Fulton, as well as the town of Lysander in Onondaga County and town of Ellisburg in Jefferson County. Contact him at barclaw@assembly.state.ny.us, or (315) 598-5185.