Evaluating the equitability of New York State’s business and banking tax structures and their effectiveness to foster economic growth statewide
The past several months have seen New York State’s financial sector undergo a series of unprecedented changes, ranging from the breadth of government intervention to the loss or restructuring of several stalwart institutions. They are changes driving the declaration that the “old Wall Street” will not return, even after the economy rebounds. In preparation for the re-emergence of New York’s financial sector and broader economy, the Select Committee wants to review the state’s main business tax, the Corporate Franchise Tax, and the Bank Tax to ensure they better reflect the present-day makeup of the industries to which they apply. The tax expenditures from these two tax categories totaled $2.86 billion in 2005. With the state’s tax revenues declining and its private sector losing over 124,000 jobs since New York entered a recession in March 2008, the Select Committee also wants to ensure these tax incentives are structured to effectively spur job creation and solidify New York’s City’s status as the financial capital of the world.
Testimony should relate to proposals to modify New York State’s business and banking taxes. Some of the questions that testimony should address include:
• Are the various investment tax credits, deductions and other tax expenditures established under the Corporate Franchise Tax and Bank Tax doing what they were originally designed to do (i.e. create jobs, promote economic development and provide the state with an adequate return on investment)?
• Are there any aspects of the Corporate Franchise Tax or Bank Tax that create inequitable advantages between large and small businesses or businesses in related industries? How can a better balance between these businesses be achieved?
• How does the structure of the business and banking taxes hinder economic development in New York? In what ways do they promote it?
• Are there better ways to use tax incentives to revitalize urban areas, such as New York City, Buffalo and Syracuse?
• Are the business and banking taxes structured in a way that allows companies to move tax liabilities out of state, or prevents them from doing so?