Liz Krueger, 'Nixon Liberal', Worries that Cuomo's Tax Plan Just Tinkers With Real Problems

 

By Azi Paybarah

If Andrew Cuomo makes adjustments to the state tax code that shift more of the burden from poor people to rich people without necessarily generating any more overall revenue for the cash-strapped government, is it truly progressive?

State Senator Liz Krueger, a liberal Democrat from Manhattan who wrote her master's thesis on tax policy while at the University of Chicago, thinks not.

"The state needs the money," Krueger told me Friday. "I think it's imperative we not cut services for the neediest New Yorkers when demands are skyrocketing."

"Once you decide you're going to change the [tax] brackets, you can finesse in any direction," she said. "My concern, after sort of having walked this through with the governor and then heard him actually talk about changing the brackets, or one of his people saying it, is you can do it neutral. You can do it tax-neutral: people earning more pay more, people earning less, pay less, but have a neutral outcome so that the changes you make within those brackets translate to no additional income in the state of New York."

That prospect, that Cuomo will move to shift around the tax burden without closing the budget deficit, is something Krueger said she's "very concerned about."

"Certainly, it's not the way I want the governor to go," she said.

Krueger said she's recommended to the governor that he make other tweaks to the state's tax codes. For example, she said, there's "$26 billion a year we don't collect because of special decisions we've made as exceptions we've written into to the tax code. And we don't do anything to after the big-time tax fraud." (Closing "loopholes" is a time-honored tradition for executives looking to raise money without technically raising taxes.)

A shortfall of up to $3.5 billion has been projected for next year's budget, meaning that without additional revenue, the state will have to make massive cuts to spending on things like social services.

Here's Krueger on her 1981 master's thesis on taxes:

"I wrote my master's thesis on how Richard Nixon's approach to taxation is exactly where we should be now, when was Richard Nixon a liberal," she said. "I actually thought Richard Nixon had the right answers on tax policy. So I'm a Richard Nixon liberal.

"He proposed a progressive tax system that would tax you at a higher level than they were taxing at the time but in fact provide a tax credit to you if you had no income. He wanted to replace the entire welfare system with a negative income tax, where, if you didn't make enough money to meet a certain [criterion], we wrote you a check from the government. And if you made enough, you wrote us a check, and the more you made, the bigger the check to us, and that was Richard Nixon's tax policy, which he couldn't get through Congress because the quote-unquote liberal Democrats at the time though it was too conservative."

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Publication date: 
Monday, December 5, 2011 - 00:00