Initiative Would Raise More than $6 Billion in Revenue to Nearly Halve Budget Shortfall While Reforming New York's Tax Code to Make it Fairer
ALBANY, NY – A group of Democratic Senators today introduced the Fair Share Tax Reform Act of 2009, an initiative that would raise more than $6 billion in new revenue by slightly increasing taxes on the wealthiest 5% of New Yorkers, those making more than $250,000 a year. The reform package would nearly halve New York's budget deficit while making the tax system fairer, more progressive and in line with neighboring states. Today, New Yorkers who make more than $40,000 a year are subject to the very same marginal tax rate as those who make $400,000 or $40 million.
Over the last 30 years, New York has reduced income tax rates on the wealthiest New Yorkers by more than 50% and eliminated high income tax brackets so that working class families and the very rich pay the same tax rate. Currently, every New Yorker who earns more than $40,000 pays the same marginal tax rate of 6.85%, whether their income is $41,000 a year or $4.1 million. Fair Share Tax Reform would create new income brackets for individuals or families making more than $250,000, $500,000 and $1,000,000 at 8.25%, 8.97%, and 10.30% respectively. These new tax brackets would raise more than $6 billion in new added revenue.
The Fair Share Tax Reform proposal would mean New York State wouldn't have to make billions in cuts to schools, healthcare, and communities. It could help prevent increases in class sizes, teacher layoffs, hospital and nursing home closings, longer wait times in emergency rooms and deep cuts to hundreds of important programs like housing assistance and homeless shelters.
"The Governor is absolutely right that in these challenging financial times, we all need to share the sacrifice," said Senator Eric Schneiderman (D-Manhattan/Bronx). "That's why it is so important that we ask our State's wealthiest to contribute their fair share as well. Currently, the richest 1% of New Yorkers pay 6.5% of their total income in state and local taxes while the poorest 20% of New Yorkers pay 12.6% of their income. Fair Share Tax Reform would return fairness to our tax system while cutting our State's budget deficit in half, eliminating the need to make the most devastating cuts to our communities."
"It is very irresponsible public policy for an individual who makes $40,000 a year to be subject to the same tax rate as an individual who makes $4,000,000 a year," added Senator Neil Breslin (D-Albany).
"The Fair Share Tax Reform Act implements a progressive tax structure, making it more equitable for low-income and working families," said Senator Antoine Thompson (D-Buffalo). "Those hardest hit are typically the ones that can least afford it."
"The tax cuts provided to the wealthiest New Yorkers over the past 30 years are no longer viable during these difficult economic times," said Senator Velmanette Montgomery (D-Brooklyn). "If we don't take this path and ask high-income New Yorkers to pay their fair share, then we will inevitably be faced with devastating cuts to health care, education and other essential community services. If there was ever a time to consider fairness in our tax code, it is now."
"This legislation would create a much fairer system of taxation for all New Yorkers," continued Toby Ann Stavisky (D-Queens). "There is no reason why someone earning $40,000 a year pays the same marginal tax rate as someone earning $4 million. This bill would correct this inequity."
"The proposed legislation ensures that every New Yorker, irrespective of socio-economic status, is contributing their fair share to reduce our deficit," said Ruth Hassell Thompson (D-Mt. Vernon). "Our regressive tax system exacerbates the woes of our most vulnerable New Yorkers. A more progressive system would help us move forward as we create a more equitable system for working New Yorkers."
"The Fair Share Tax Reform legislation will restore balance to our tax code and provide much needed revenue at a difficult time in our state's history," said State Senator Ruben Diaz (D-Bronx). "I am proud to support this proposal and look forward to working with my colleagues in the Legislature to move it forward."
"During these most difficult and trying times, we must all share in the sacrifices that need to be made," continued State Senator Eric Adams (D-Brooklyn).
Senator Andrea Stewart-Cousins (D–Yonkers) stated, "The time has come for New Yorkers to be taxed in an equitable manner. Why should families earning $40,000 per year have the same marginal tax rate of those earning over $250,000? It doesn't make sense. We can no longer rely on increasing property taxes to pay for services. This practice is not fiscally sound or equitable and as a result, too many families are having difficulty making ends meet. This legislation is an important step in the right direction that will not only cut the State's looming deficit, but also create a fairer system of taxation."
State Senator Hiram Monsserate (D-Queens) added, "This is a responsible measure to ensure that desperately needed resources are available at a time of great need for our state."
In December, more than 100 New York State economists, including Nobel-prize winner Joseph Stiglitz, endorsed a proposal similar to Fair Share Tax Reform as a proposal that is economically preferable to massive spending cuts. Their letter is viewable online here: http://www.fairsharereform.com/economists.
Additionally, dozens of New York's religious leaders endorsed Fair Share Tax Reform in an open letter to Governor Paterson and Albany legislators as an alternative that would not force working and middle-class families to carry the burden of the budget crisis alone. This letter is viewable here: http://www.fairsharereform.com/clergy.