There’s a classic scene in A Charlie Brown Christmas where Lucy tells Charlie Brown what she really wants for Christmas: real estate. And for New York State taxpayers, they are getting just that.
Last Thursday, Gov. Andrew Cuomo gave the state an early holiday present: $785 million worth of state aid for infrastructure projects and new developments throughout 10 regions, with the top prizes going to Long Island ($101.6 million) and Western New York ($100.3 million). While this number may seem small compared to major office trades in Manhattan, many of these projects will have the capacity to transform entire neighborhoods, provide much-needed affordable housing options and create good-paying jobs for New Yorkers anywhere from the Bronx to Brookhaven. [A full list of the winners can be viewed here.]
This news, however, was overshadowed by Cuomo’s three-year, three-pronged tax code overhaul, which was spun in the mainstream media as the nation’s first big millionaire’s tax. But this isn’t 100% accurate.
Households making $40,000 all the way to $2 million will see declines of several percentage points per year, but those earning over $2 million will also get a cut. [see chart]
Income Level Previous Tax Rate New Tax Rate
$40,000 to $150,000 6.85% 6.45%
$150,000 to $300,000 6.85% 6.65%
$300,000 to $2 million 7.85%-8.97% 6.85%
Over $2 million 8.97% 8.82%
These reforms, I believe, level the playing field for everybody. It gives working- and middle-class residents a break while giving the wealthiest an incentive to continue living and working in New York State – hence its title, the “Fair Tax Code” plan. At the same time, the meat of Cuomo’s plan is focused not on tax reform, but on spending. It’s not a traditional way to fill a $3.5-billion budget gap, but here’s how it can work.
There’s the NY Works Initiative, a $700 million program that will access capital from the private sector, pension funds and state sources for infrastructure improvements. Giving special attention to capital projects, Cuomo said monies would go to the reconstruction of the Tappan Zee Bridge, as well as ongoing transportation and road projects being completed by the Port Authority of New York & New Jersey and the Metropolitan Transportation Authority.
In addition, MTA’s payroll tax on small businesses and schools will be reduced; the manufacturing tax rate will be lowered; a gaming agreement for new casinos will be created; and tax credits for job training programs for inner-city youths will be made available.
It is a bold measure that other states and local government have shunned in favor of austerity. By investing in the state’s infrastructure and new projects, we can generate revenue and jobs for many years to come. And that’s truly the best gift of all.
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