Advocates, headed by New Yorkers for Fiscal Fairness, met in the Capitol last week to urge Gov. Andrew Cuomo to create a Tax Reform and Fairness Commission, first proposed in December 2011
The group, a mélange of tax reform organizations that call themselves the Omnibus Consortium, also pointed out problems with the way the governor laid out the commission in both his State of the State and budget addresses earlier this year. The advocates believe the governor should not insist on commission proposals being revenue neutral and should focus on local taxes in addition to state taxes.
“On three separate occasions the governor has stated that he would form a tax reform and fairness commission but we have yet to see him take any action to address the issue,” said Ron Deutsch, executive director of New Yorkers for Fiscal Fairness.
The advocates claim excluding local taxes from any commission report would be ignoring property tax burdens on local taxpayers, a problem they say stems from the state wanting to maintain personal income tax levels, despite increasing costs.
“People pay a variety of different taxes,” said Frank Mauro, executive director of the Fiscal Policy Institute, highlighting local taxpayer burden.
John Whitely of the New York State Property Tax Reform Coalition said while New York’s state taxes are 5 percent above the national average, its local taxes are 35 percent above the national average. Ignoring local taxes, the advocates claim, would not address taxation problems in New York.
The advocates also say while the personal income tax remains progressive, local taxes in New York have become regressive. Citing the Institute on Taxation and Economic policy, proponents for the commission say when state and local taxes are combined, households earning between $33,000 and $56,000 pay a higher percentage of their income than those making between $209,000 and $633,000.
Solely focusing on state taxes, the consortium says, would be ignoring a large burden placed on lower and middle-income families.
The tax reform proponents also say to create a revenue-neutral commission would limit its functionality because variables such as job creation can impact revenue.
The Omnibus Consortium believes the commission should be comprised of economists and “affected parties,” and allow for electronic recommendations from citizens over the internet before it makes any recommendations.