The recession and its strangle hold on New York State’s traditional revenue sources have exposed vulnerabilities and inequities in the state’s tax policy. New York State’s overdependence on tax revenues from Wall Street, coupled with the mounting financial pressures on middle-income households, have created an imperative for lawmakers to reassess how and where New York State pulls its revenues. The Select Committee will examine proposals for establishing a more progressive personal income tax system. Among the proposals the committee will examine will be Senator Eric Schneiderman’s proposal (S.2021) that would create new income tax brackets for New Yorkers earning over $250,000 annually; thus eliminating the flat marginal tax rate of 6.85 for households earning $40,000 and up. The committee will also examine Senator Jeff Klein’s proposed legislation (S.2654), which also establishes new higher income brackets while providing relief to lower income taxpayer’s in the form of debit cards.
TESTIMONY WILL BE BY INVITATION ONLY
Testimony should relate to proposals to modify New York State’s personal income tax rates. Among the questions that testimony should address are:
• How much additional income could New York State expect to receive from the establishment of a progressive personal income tax system over the long- and short-term?
• How would different proposals for increasing the tax rate on high income earners address state revenue needs?
• What is the best way to set income tax rates to improve equity across income levels of the overall tax structure?
• How much more stable would New York State’s tax revenue stream become through the establishment of a progressive personal income tax system?
• What impact would higher personal income taxes have on New Yorkers earning over $250,000 annually and the communities in which they live?
• How does relative saving versus spending behavior differ among various income levels, and how will these behaviors be impacted by changes to income tax rates?
• How would creating a more progressive personal income tax system impact New York State’s economy, in terms of job creation and competitiveness?