SENATOR FUSCHILLO ANNOUNCES TAX REFORM PROPOSALS
Recommendations in Newly Released Report Call for State Taxes to be Reformed, Simplified, and Reduced
Senator Charles J. Fuschillo, Jr. (R-Merrick) today announced his support for a Senate plan which would reform, simplify, and reduce taxes for families and businesses throughout New York State. The plan, which was recommended as part of a recently issued Senate report, also recommends enacting a permanent two-percent state spending cap and dedicating surplus revenues to tax reductions.
“New York State has made significant progress over the last several years in reducing taxes, controlling spending, and promoting economic development, but we need to do much more to make New York State more affordable for families and businesses. The tax cuts and reforms included in this plan will help improve our business climate, make New York State more economically competitive with other states, create jobs, and put more money back into the pockets of families and businesses,” said Senator Fuschillo.
The Tax Reform Action Plan includes the following:
Cap State Spending – Limit Tax Increases
· Formalize and make permanent a two percent cap on State spending growth. Over the past two years, the State has saved $17 billion by adhering to a self-imposed two percent cap. By making a cap permanent going forward, New York will save an additional $11 billion over the next four years – providing ample room and flexibility for tax cuts and pro-growth tax reforms to be implemented;
· Reduce tax rates by establishing a new dedicated Tax Freedom Fund (TFF). The TFF would be tied to the two percent State spending cap, and every dollar of surplus savings at the end of the fiscal year would be targeted directly toward the reduction of taxes; and
· Enact a two-thirds majority vote requirement for tax increases.
Personal Income Tax
· Create an optional simple Personal Income Tax calculation. Dramatically simplify the tax code by basing income calculations on the Federal Adjusted Gross Income (F-AGI) with only one single adjustment.
· Make permanent the inflation adjustments enacted in 2013 for income tax brackets, the standard deduction, and child credits to help ensure that taxpayers don’t see tax increases simply because of inflation and wage growth;
· Eliminate unfair tax treatment by making all retirement income tax-free, thus encouraging seniors to remain in New York. Currently only Federal, State, and local pension income is completely tax-free; and
· Take specific steps to reform and simplify New York’s tax code, including the elimination of the Personal Income Tax (PIT) Minimum Tax.
· Amend New York’s onerous Estate Tax by conforming it with the Federal Job Creation Act and the American Taxpayer Relief Act to protect family farms and small businesses and eliminate the incentive to transfer wealth from New York to other states.
Corporate Income Tax
· Review New York’s current, piecemeal-style approach to tax relief – which involves providing tax credits to specific industries – in favor of a simplified system that produces a lower tax structure for all businesses;
· Reduce Corporate Tax Rates with the goal of elimination by adopting a trigger to reduce corporate tax rates 15 percent across-the-board if new State revenues exceed $500 million;
· Combine the Bank Tax and Corporate Franchise Tax;
· Reduce Corporate Franchise Tax rates with a commensurate reduction in the value of all business credits and tax preferences;
· Eliminate the Corporate Alternative Minimum Tax (AMT);
· Reduce taxes that hurt job creation and hinder the competitiveness of small businesses and manufacturers, including the complete elimination of the Corporate Tax on manufacturers;
· Align with Federal tax preferences and definitions to further simplify the tax code;
· Make the Brownfield Tax Credit permanent in order to encourage new projects and investment in key areas that are badly in need of economic activity; and
· Create an Angel Tax Credit and make the Film Tax Credit more directly accessible to New York studios.
· Review the not-for-profit exemption to ensure accountability and proper use of the exemption.
· Make the property tax cap permanent; and
· Provide temporary property tax relief to millions of hardworking families across the State until the full impact of the tax cap is realized.
· Accelerate the reductions in the 18-A Utility Tax Surcharge so that it is phased-out in two years instead of four, and is eliminated in SFY 2016-17;
· Eliminate the MTA Payroll Mobility Tax on government entities to prevent double taxation;
· Eliminate the MTA-region car registration and driver’s license fee increases that were imposed in 2009; and
· Remove the obsolete Stock Transfer Tax language from the Tax Law.
Streamlining Tax Filings
· Review the administrative cost to taxpayers of taxation and tax filings.
The tax reform plan was part of recommendations issued in a recent report by the Senate Finance Committee and Senate Investigations Committee. Over the past two months of public hearings, the committees heard testimony, received written communications and met with New York’s business leaders and stakeholders across the state. There were consistent themes that emerged from job creators: the need for broad-based tax reductions in corporate and personal income taxes, with the inclusion of some of the more important tax credits, and the need for simplicity in the tax code.