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Nobel Economist:
Millionaires' Tax Is Economically Preferable
In a
March 27, 2008 letter
to Governor Paterson, Majority Leader Bruno and
Speaker Silver, Nobel economist Joseph Stiglitz makes a compelling case that the
millionaires' tax is "economically preferable" to raising regressive fees or
cutting state spending. Also see:
Closing
state deficit requires prudence, by former budget director Dall Forsythe and
Shanna Rose (Albany Times Union, December 10, 2008) and
How Not to Deal
with the Oncoming Depression: The Case of New York State,
by
Lawrence S. Wittner,
Professor
of History at SUNY Albany (History News Network, December 1,
2008).
Related:
Look to the rich for a budget fix, by Fred LeBrun (August 3, 2008 Albany Times
Union), Voters
Back Millionaire's Tax 4 - 1 (Quinnipiac poll, August 6, 2008).
More >>
Budget Cuts vs. Tax Increases at the State Level: Is One
More Counter-Productive than the Other During a Recession?
In this 2001 essay, Dr. Joseph Stiglitz, University Professor of Economics at
Columbia University and one of the recipients of the 2001 Nobel Prize in
Economics, and Dr. Peter Orszag, who is now the Director of the Congressional
Budget Office, explain why budget cuts and tax increases are both
counterproductive during a recession and how economic reasoning can help state
policy makers in selecting the least damaging mix of budget balancing strategies
during economic downturns. More >>
New York Shouldn't Look to Massachusetts as a
Model for Property Tax Reform
With the Commission on Property Tax Relief poised to recommend that the state
impose a rigid cap on property taxes for education based on Massachusetts’
Proposition 2 ½, a report from the Center on Budget and Policy Priorities
(May 21, 2008) describes the problems the law has created in Massachusetts and explains that
the impact in New York could be even more severe.
More about Hidden Consequences:
Press release -
html,
pdf
Executive summary -
html
Full report -
pdf
Among the key lessons:
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A tax cap won’t make government
services cost less.
-
Claims that caps will produce large
savings through “efficiencies” are overblown.
-
Tax caps can be particularly
harmful if adopted during a weak economy.
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State aid can’t be relied upon to
fill the gap.
-
Changes in school enrollment can
have a big impact.
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Without effectively targeted state
aid, low-income communities will fall even further behind.
-
Wealthier communities will override
a tax cap more frequently than poorer ones.
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Middle-income communities might end
up bearing the brunt of a cap.
Working for a
Better Life: Immigrants in New York's Economy
What
role do immigrants play in the New York State economy? This profile of
immigrants in the state economy shows that
in 2006, they added $229 billion in economic
activity - fully 22.4 percent of the state's gross domestic
product. FPI also examines what countries immigrants come
from, where they work and how well they are doing. The report includes detailed
analysis of the role of immigrant workers and families in three distinct
regional economies: New York City, the downstate suburbs, and upstate.
 An
Agenda for Shared Prosperity
With a new governor in Albany for the
first time in 12 years, New Yorkers have high expectations for the future,
seeing a rare opportunity for the state to reevaluate its policies in a wide
variety of areas.
Explore
One New York
to learn more about FPI's contribution to this much-needed effort, from November
2006.
Danger & ripoffs are on the rise: How hot construction biz brings a black
market, scams & death. A series of stories in the Daily News
describes the human side of FPI's recent report,
The Underground
Economy in NYC's Affordable Housing Construction Industry.
Also see the
follow up story on Mayor Bloomberg's reaction:
We'll make quick fix, Mike vows.
Corporate Tax Policy and the Right to Know: Improving State Tax Policymaking by
Enhancing Legislative and Public Access (PDF).
Prepared for the
Fiscal Policy Institute in 1993 by
Richard D. Pomp, the Alva P. Loiselle Professor of Law at the University of
Connecticut's School of Law and the former Executive Director of New York
State's Legislative Tax Study Commission.
BEHIND THE NEWS: What is the Regional Greenhouse Gas
Initiative (RGGI) and how can it be most effectively implemented? To better understand the economics
of the implementation of the RGGI, which was adopted in
December 2005 by the Governors of seven Northeastern states under
Governor Pataki's leadership, read the following paper by J. Andrew Hoerner
of Redefining Progress: Regional Initiatives to Reduce Greenhouse
Gasses: The Crucial Importance of Auctioning Permits for Jobs,
Competitiveness, and Equity
(PDF).
Also worth reading on this subject are the
Preliminary Oral
Comments of New York State Attorney General Eliot Spitzer on the
Allocation of Carbon Dioxide Allowances Pursuant to the Regional
Greenhouse Gas Initiative Cap-and-Trade Program
(HTML) as delivered
by New York State Assistant Attorney General J. Jared Snyder to a
meeting of the RGGI's Stakeholder Group in Hartford, CT on May 2, 2006.
The
Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job
Creation
by Greg LeRoy (published July 21, 2005 by Berrett-Koehler
Publishers, Inc.) Available in most local bookstores and online through
all book selling services.
Charlotte Cuno et
al., v. DaimlerChrysler et al. (PDF). In a landmark decision issued on
September 2, 2004, the US Court of Appeals for the Sixth Circuit ruled that the
State of Ohio's investment tax credit violated the Commerce Clause of the US
Constitution. Rather than immediately appealing this decision to the US Supreme Court,
DaimlerChrysler asked the Sixth Circuit to take the unusual step of rehearing the the
case en banc.
Click here for
Appellants' Memorandum in Opposition to Petitions for Rehearing En Banc in the Case of
Charlotte Cuno et al., v. DaimlerChrysler et al. (PDF)
The Sixth Circuit subsequently declined this request and
DaimlerChrysler then asked the Supreme Court to hear its appeal of the
Sixth Circuit's decision. That request was granted and DaimlerChrysler
et al. filed their briefs with the Supreme Court on December 5, 2005.
The plaintiffs/respondents filed their briefs by January 23, 2006. The
Fiscal Policy Institute was among the various organizations that filed
amicus briefs with the Supreme Court in this case.
Click here for a copy of the
amicus curiae brief filed by the Fiscal Policy Institute together with
Connecticut Voices for Children and Good Jobs First. Oral
arguments were heard by the Supreme Court on march 1, 2006. If the
Sixth Circuit's decision is upheld by the Supreme Court, it would serve
to substantially de-escalate the current economic war among the states;
in effect, serving to save the states from themselves. For a
general discussion of this issue see
Ideas for Ending (or, At
Least, De-escalating) the Economic War Among the States (PDF), a
paper presented by FPI Executive Director Frank Mauro at symposium on
the Economic War Among the States co-sponsored by FPI and Good Jobs
First at Georgetown Law Center, June 26, 2003.
Chapter 40 of the Laws of 2004 of the
State of New Jersey (PDF) In this new law which was approved on June 28,
2004, New Jersey increased its top income tax rate, for tax years beginning on and after
January 1, 2004, from 6.37% on the portion of taxable income above $75,000 for single
individuals and $150,000 for married couples to 8.97% on the portion of taxable income
above $500,000 regardless of filing status. This represents a significant shift in
the traditional relationship between the top income tax rates in New York and New
Jersey. For the first time in history, the top New Jersey rates are now
substantially higher than the top New York rates. New York State's
temporary top rate
of 7.7% on taxpayers with taxable incomes of $500,000 or more is schedule
expired on December 31, 2005. New York's current top income tax
rate is 6.85% for married taxpayers with taxable incomes above $40,000 and single
taxpayers with incomes above $20,000. The 6.85% top rate is more
than 55% lower than the state's top income tax rate in 1974.
Rethinking Growth Strategies
(HTML). Professor Robert Lynch's comprehensive review of all the academic research
on How State and Local Taxes and Services Affect Economic
Development (HTML). Published in March 2004 by the Economic Policy
Institute. Robert Lynch is Chair of the Economics Department at Washington College in
Chestertown, Maryland, and former chair of the Economics Department at SUNY
Cortland.
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FPI in the news.
December 22, 2008. Low Wages, No Bargain.
The outlook for this holiday shopping season is bleak. Despite more shoppers in
the stores, looking for steep discounts, profits are down. And corporate owners
aren’t the only ones getting hurt. The retail sector has long been an important
part of the local economy - and is more critical than ever given the ongoing
retrenchment of the financial sector. But jobs in retail too often fail support
the American dream, as shown by demographic information about retail workers in
the city's five boroughs.
December 16, 2008.
FPI Reaction to the
Executive Budget. The governor’s proposal hurts low- and moderate-income New
Yorkers while requiring little from wealthy New Yorkers, and would would cause
needless harm to the state economy. The lessons from 2003 show that New York can
successfully close large budget gaps without these negative impacts.
December 13, 2008.
Economists to
Governor: Raise High-End Income Taxes To Help Close Budget Gaps (press release
and letter). More than
100 economists from throughout New York State joined together this week to send
a message to Albany: steep cuts in state spending will weaken the already
struggling New York economy, and will hurt poor and middle income New Yorkers.
In a letter to the governor, the economists urge him to take a balanced approach
to closing the gap in the state budget between revenues and spending - an
approach that includes raising taxes on high-income households.
UPDATED: Letter with
120 signers.
December 11, 2008. New York City
Unemployment in 2009: The Emerging Crisis. While New York City lagged the
national economy entering the downturn, the recession is clearly here in full
force, and labor market conditions are likely to deteriorate rapidly in the
months ahead. The number of unemployed New York City residents could rise by
120,000 over the next year, escalating the hardships felt by tens of thousands
of New York families and straining the social safety net.
November 20, 2008.
They're a part of the Island: Immigrants pay taxes and otherwise contribute to
our community. A column by FPI senior fellow David Dyssegaard Kallick,
Newsday.
November 19, 2008.
After the
Meltdown: New York's Future.
By James Parrott, FPI's deputy director and chief economist, who writes regularly for Gotham
Gazette's Economy
section.
November 13, 2008. Testimony of Frank Mauro and Ronald Deutsch before the
Assembly Ways and Means Committee hearing on the impact of the economic crisis
on the state budget. To avoid deepening the already threatening recession, the
state must not rely solely on drastic cuts in state spending to close current
and expected budget gaps. A balanced approach includes tapping the state's tax
stabilization reserve fund (put together for this very purpose), surgical cuts
in wasteful spending, and a high-end income tax surcharge like that used
successfully in 2003 to close post-9/11 gaps.
November 6, 2008.
Testimony of James
A. Parrott before the New York State Commission on State Asset Maximization.
To fulfill the commission's charge to "maximize the value and use of state
assets," the state should carefully consider in-house design and prevailing wage
standards when setting up new projects. Also, economic development subsidies
should include strict accountability standards; the state should not act as
project investor without receiving in return an ownership stake for the
taxpayers.
October 16, 2008.
Wages for Young New York Workers Stuck at 1979 Levels: Union representation
means higher wages, more benefits.
A new report from the
Center on Economic and Policy Research, Unions and Upward Mobility for Young
Workers, shows that the median wage in New York State for unionized young workers is
13 percent higher than for nonunion - and 15.5 higher for young women.
Press release including
New York-specific data.
September 22, 2008.
The End
of Wall Street as We Know It.
By James Parrott, FPI's deputy director and chief economist, who writes regularly for Gotham
Gazette's Economy
section.
September 16, 2008. Unions Lift Wages for New York's Hispanics:
Unionization doubles health care and pension coverage. A new report from the
Center on Economic and Policy Research, Unions and Upward Mobility for Latino
Workers, shows that the median wage in New York State for unionized worker is
$16.46 per hour, compared to a median of $12.00 per hour for nonunion.
Press release including
New York-specific data.
September 15, 2008.
Testimony of
James A. Parrott before the New York State Commission on MTA Financing.
Albany will have to make some tough choices to align the MTA's recurring
spending needs with recurring revenues. It will not be easy to do this during a
downturn, but it is imperative that the State and the City put in place a
phased-in approach that stabilizes MTA finances for the long term.
September 12, 2008.
Brooklyn Labor Market Review.
Commissioned by the Brooklyn Chamber of Commerce, this review finds that
Brooklyn will experience a weaker labor market, and slower wage and income
growth in 2008 and through the first half of 2009. However - attesting to the
diversity and resiliency of Brooklyn's economic base - the borough's job decline
will be far less than New York City's, just as in the previous slowdown of
2001-03.
Press release,
full report.
September 8, 2008.
Bush Administration Rule Would Force Health Centers to Close: Congress Urged to
Block Hostile Rule and Provide Temporary Fiscal Relief Through Medicaid. FPI
and others point out the wide-ranging negative impacts of the new rule, and ask
for support for a one-year moratorium and for inclusion of a temporary
increase to the Federal Medical Assistance Percentage (FMAP) in
the second emergency supplemental stimulus package.
Press release,
letter to members of Congress.
August 28, 2008.
Job losses rise,
straining state unemployment insurance: Unemployment up by 56,000 in the first
half of 2008; In 25 counties, increase is over 20 percent. New York’s
projected budget gaps have received considerable attention in Albany. The
state’s growing unemployment is the other crisis to which Albany must also turn
its attention. Press release,
full report.
August 26, 2008. New York has the highest
poverty rate of all northern states. No progress on poverty and family
incomes since the 2001 recession. Fewer New Yorkers are now uninsured but
2.5 million still lack health insurance. FPI's look at new Census data for
New York. Includes figures for larger
counties, cities and towns,
as well as New York's standing among the 50 states.
August 15, 2008.
Short Term Tax
Relief and Long Term Tax Reform: An Omnibus Bill Approach. Although the
current property tax debate is profoundly concerned with tax fairness, tax
reform options are receiving little attention as elected officials, the media,
advocates and the general public look for ways to deliver to tax relief. The
immediate priority is best treated by a circuit-breaker; longer term, in order
to ease pressure on the local property tax base in a geographically balanced
way, the state should take over
$6 billion of school costs and assume $3 billion of revenue
sharing.
August 14, 2008. Déjà
Vu All Over Again – Budget Balancing in Bad Times: Raising Revenue Needs to be
Part of the Solution, Lessons From the Last Two Recessions.
August 6, 2008. Latest IRS
Data Reveal Fundamental Mismatch Between New York's Income Distribution and Its
Tax System.
July 31, 2008. Working for a Better
Life: A Profile of Immigrants in the New York State Economy.
A presentation by senior fellow David Dyssegaard Kallick to Teaching Hudson Valley,
an annual summer institute for teachers, librarians, and others who work with
children to focus on the culture, ecosystems, and history of the Hudson Valley.
July 22, 2008.
Increase in minimum
wage doesn't affect New Yorkers: Nearly 300,000 could be helped by state
legislation. Although the federal minimum wage is set to increase on July
24, New York needs state legislation to move the purchasing power of the minimum
wage closer to historic levels - and to a level that can keep a family of three
out of poverty. By increasing the minimum wage, New York would improve the
lot of workers without disrupting the labor market.
Press release,
full report.
July 10, 2008.
Restoring the Purchasing Power of New York State’s Minimum Wage. A look at
recent efforts to increase the minimum wage - in New York and nationally -
reveals that the current minimum wage falls far short of historic levels, and
cannot keep a family of three out of poverty. By increasing the minimum wage,
New York would improve the lot of workers without disrupting the labor market.
June 11, 2008.
Thirty
Percent of New Yorkers in Working Families Can’t Cover Basic Needs with Their
Wages: Work Supports Can Make a Difference, But More Must Be Done. This
report analyzes the effectiveness of "work support programs" (such as food
stamps, Child Health Plus and the Earned Income Tax Credit) in bridging the
hardship gap experienced by 5.7 million New Yorkers - that is, the gap between
family wages and a basic family budget standard.
Press
release, full
report.
June 2, 2008.
Testimony on Proposed Legislation Addressing Real Property Taxation Issues.
Presented by FPI Executive Director Frank Mauro to the Senate Standing Committee
on Local Government and Assembly Standing Committee on Real Property Taxation.
The Middle Class STAR rebate program is better targeted than the original STAR
program in that in takes income into consideration. However, Middle Class STAR
is still not efficient and equitable property tax relief, since it does not take
the size of a homeowner’s property tax bill into consideration and it is still
based on county and school district average of important variables. A circuit
breaker like S.1053-a/A.1575-a would address both of these shortcomings. The
bill would be improved by a broader definition of income.
May 29, 2008.
Community Development Done Right. A column by David Dyssegaard Kallick, New
York Metro.
May 20, 2008.
The Economics of Low Income Energy Assistance in New York:
No Wonder They Call Economics the "Dismal" Science. A presentation by FPI senior
economist Trudi Renwick and Gerald Norlander of the
Public Utility Law Project
of New York, prepared for NYSERDA's 2008 Low-Income Forum on Energy (LIFE). With
prices for power and heating fuel rising faster than wages or assistance -
against a backdrop of widespread poverty in upstate cities, the situation is
grim for low-income families. Renwick and Norlander lay out specific standards
for reform of assistance programs.
May 19, 2008. The Role
of Worker Notification in a New Economic Strategy for New York. In response
to the plant closures and mass layoffs of the 1980s, Congress enacted the Worker
Adjustment and Retraining Notification (WARN) Act. However, the legislation
covers only larger businesses, and lacks an enforcement mechanism. Several
states (CA, IL, NJ) have adopted their own WARN legislation. Such legislation in
New York would benefit not only the upstate economy but also the downstate
economy now being buffeted by massive layoffs in the financial sector.
May 15, 2008. Unions
Make a Big Difference for Low-Wage Workers. A new report from the
Center for Economic and Policy Research
analyzes Current Population Survey data from the Census Bureau and finds that
workers represented by a union have higher wages, especially at the low end of
the scale.
Press release,
report.
"Too often, people think there’s not much we can do to reverse polarization
in our economy. Here’s clear evidence that unionization helps: it raises wages
for all workers, and it raises them especially among lower-wage workers."
- David Dyssegaard Kallick, FPI Senior Fellow
May 14, 2008.
How Will the
Economic Downturn Affect New York City’s Nonprofit Sector? As public funds
and private donations come under strain, and uncertainty clouds the horizon, New
York's nonprofits can respond not only by cutting costs, but also by presenting
cogent facts about the impact of recession on society. Presented by senior
fellow David Dyssegaard Kallick
at Brooklyn Nonprofit Day: Proactive Responses to the Economic Downturn. Sponsored by the Nonprofit Connection and Citi
Foundation. Brochure. Additional presentations
were given in
Manhattan (May 1) and
Queens (May 7).
May 7, 2008.
How Will the
Economic Downturn Affect New York City’s Nonprofit Sector? As public funds
and private donations come under strain, and uncertainty clouds the horizon, New
York's nonprofits can respond not only by cutting costs, but also by presenting
cogent facts about the impact of recession on society. Presented by chief
economist James Parrott
at Queens Nonprofit Day: Proactive Responses to the Economic Downturn. Sponsored by the Nonprofit Connection and Citi
Foundation. Brochure. Additional presentations
were given in
Manhattan (May 1) and
Brooklyn (May 14).
May 6, 2008.
New Report: Fed Directive Threatens to Cut Funds for New York
Children’s Health Coverage. A report from the Center for Children and Families
at Georgetown University shows that the Bush administration bypassed Congress to
issue a directive that will cut children's health insurance funding in New York
- at a time when residents and taxpayers can ill afford it. Report co-released
by FPI, New York Children's Action Network and
Medicaid Matters New York.
May 2, 2008. Testimony
on the The Economic Situation of New York City's Low- and Moderate-Income
Households. Presented by chief economist James Parrott to the Rent
Guidelines Board. A picture of a shallow recovery, high housing cost burdens and
a shrinking middle class - plus a local economy in recession.
May 1, 2008.
How Will the
Economic Downturn Affect New York City’s Nonprofit Sector? As public funds
and private donations come under strain, and uncertainty clouds the horizon, New
York's nonprofits can respond not only by cutting costs, but also by presenting
cogent facts about the impact of recession on society. Presented by chief
economist James Parrott
at 2008 Nonprofit Day: Proactive Responses to the Economic Downturn, for
Manhattan, Bronx & Westchester. Sponsored by the Nonprofit Connection and Citi
Foundation. Brochure. Additional presentations
were given in Queens (May 7)
and Brooklyn (May 14).
April 21, 2008.
New Jersey town offers immigration insights. A column by FPI senior fellow
David Dyssegaard Kallick, Newsday.
April 15, 2008.
City Could
Raise Revenues and Level Playing Field for Business. FPI examines the
business tax treatment of "carried interest" earned by private equity fund and
hedge fund managers, and finds that closing the carried interest loophole could
raise $160-$225 million in new revenue for New York City - while leveling the
playing field for New York businesses.
Press release,
full report.
April 9, 2008. Pulling
Apart in New York: An Analysis of Income Trends in New York State. New York
has the dubious distinction of having the widest income gap between the rich and
the poor of all 50 states, according to this report released by FPI in
conjunction with a national study by the Center on Budget and Policy Priorities
and the Economic Policy Institute. The report also shows that inequality in New
York City is even more extreme than in the state as a whole.
Press release,
full report. CBPP/EPI’s full
report, press release and state fact sheets are available at
www.cbpp.org.
April 1, 2008.
Is America becoming a lottery society? An op ed by
FPI senior fellow David Dyssegaard Kallick, New York Metro.
For earlier FPI publications, please see the
archives. |
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