Making the rich pay more in taxes is a lot different than making the jobless pay taxes, but New York wrongly made no distinction as it simultaneously hiked taxes on the wealthy by $4.3 billion and slapped folks out of work with $1.4 billion in taxes on their unemployment benefits. That unfair jobless tax must be repealed.
Almost 4 million New Yorkers lost their jobs and collected unemployment compensation last year. Congress wisely exempted the first $10,200 of those benefits from federal taxation. Normally, the New York tax code would have automatically changed too, but for complicated technical reasons, this year it didn’t.
The state was then stumped for weeks about whether President Biden’s $1.9 COVID relief bill even allowed an exemption. By the time Washington gave the all-clear, on April 7, the state budget was complete. Oops.
But nowhere does it say that once Albany passes the state budget, it can’t be changed. State Sen. Simcha Felder has a bill to follow the federal standard, and it ought to pass forthwith.
On Friday, we spoke to Sens. Brad Hoylman and Phil Boyle, who became the 31st and 32nd sponsors, making the absolute majority of the Senate, with 16 Democrats and 16 Republicans, including the Senate’s No. 2, Mike Gianaris. Republican Boyle is right that it should “pass overwhelmingly to assist those New Yorkers who have suffered financially from COVID-19.” Democrat Hoylman is also right: “Let’s get the money into the pockets of New Yorkers who need it most.” The average person would save $365.
There’s money to cover the $1.4 billion expense, as the state cash report from Controller Tom DiNapoli found tax collections were $3 billion higher than the February forecast. Majority Leader Andrea Stewart-Cousins should put the bill on the floor this week. And then quickly get it to the Assembly and Speaker Carl Heastie for passage and then for Gov. Cuomo’s signature. The May 17 Tax Day is three weeks away, so there is time, but they all must hurry.