New York is a big, diverse state, with a long list of societal needs.
Many of the state’s bridges and highways need repair. Too many New Yorkers still don’t have reliable health care.
The rising cost of college is pricing too many students out of the higher education they need to succeed in today’s economy.
And, many public schools remain under-funded. Budget cuts and the failure to invest adequately in public education are depriving students of the sound, basic education guaranteed by the state constitution.
The list goes on.
In order to better meet society’s needs, the state needs tax revenue, which is why now is the worst time for New York State to be considering a tax break for its millionaires and billionaires.
Yes, the so-called millionaire’s tax is expiring this year. Its elimination in April would drop the rate paid by the state’s highest earners from 8.82 percent to 6.85 percent and punch an estimated $4 Billion hole in the state’s budget.
This would be disastrous for middle-class New Yorkers.
In education alone, the loss of billions of dollars in anticipated tax revenue – on top of expected cuts from Washington, D.C. – would likely lead to a new round of budget cuts for our public schools and colleges.
The idea of free college tuition would wither on the vine and students from pre-kindergarten all the way up to graduate school would suffer.
I believe it is essential that Albany demand that the wealthiest New Yorkers pay their fair share. Not only should the state be extending the millionaire’s tax, it should be expanding it!
A more progressive tax structure – one that asks the wealthiest among us to pay a little more – would bring in additional billions of dollars in state revenue to help strengthen public schools and colleges, and knit a stronger safety net for society’s most vulnerable.
Research shows this kind of progressive approach to state taxes is long overdue. The Fiscal Policy Institute recently found that New York households with incomes under $100,000 pay higher effective state and local tax rates than the richest 1 percent of households.
Nobody likes paying taxes, of course. But taxes – fairly applied – are essential to a civilized society.
I don’t know about you, but the “fairly applied” part has me riled up, as well.
Did you know that about 500 hedge fund operators and partners at private equity firms benefit from a unique tax break created just for them called the “carried interest loophole?”
These super-wealthy New Yorkers are being allowed to pay a greatly reduced tax rate on much of their income by declaring this income as capital gains.
Most New Yorkers would agree that Wall Street financiers shouldn’t get preferential treatment on their taxes. The fees they charge their clients should be taxed as ordinary income – because it is ordinary income, just like the income earned by retail store clerks, nurses, truck drivers and elementary school teachers.
Imagine the possibilities for public education – and for our property taxes – if the state could bring in billions of dollars in new revenue by extending and expanding the millionaire’s tax … and by treating income earned by hedge fund operators and private equity firms fairly – in other words, the same as everyone else.
Imagine the possibilities if the wealthy were required to pay their fair share.
Maybe New York State would then be able to make necessary infrastructure improvements and ensure quality health care for all.
And, maybe – just maybe –educators in our public schools and colleges would no longer have to come begging for enough state funding to ensure that all students and all schools have what they need to thrive.
Karen E. Magee is president of the 600,000-member New York State United Teachers.
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