Senate, Assembly have very different tax plans
Senate Republicans say their version of the state budget will include a 9-year phase-in of tax cuts that would eventually total a 25 percent reduction for middle class taxpayers.
GOP Leader John Flanagan says when the Senate Majority releases it’s budget plan later in March , it will include a phase in of over $4 billion in tax cuts . They include an extension of a temporary tax cut for middle income earners, which would gradually be reduced to a rate of just over five petrcent for those who make $300,000 a year or less.
“We come at from a philosophical orientation,” said Flanagan. “We believe that people should have more money in their pockets, and government should have less of the people’s money.”
Seniors would also get a break under the plan, allowing them to exempt more of their pensions and retirement accounts from taxation.
The Senate Republican plan builds on Governor Cuomo’s proposal to cut small business taxes by $300 million dollars, the Senate would add around $200 million in tax cuts.
The plan would also speed up the timetable for elimination of an electric utility tax and estate tax reductions.
Senate Finance Committee Chair Cathy Young says there is a way to pay for the tax cuts, which would total over $4 billion a year, when fully implemented.
“It’s through a combination of spending restraint and actually, tax revenues,” Young said.
She says continuing a self imposed two percent per year spending cap, will help finance the tax cuts. The Republicans are also counting on a trend toward tax revenue growth in the past couple of years continuing through the next decade.
Senate Leader Flanagan says they don’t anticipate having to cut any spending to pay for the tax cuts.
“The automatic assumption is that we have to cut,” said Flanagan, who denies he’s being a “Pollyanna”.
“If we do things the right way and create an environment where we can actually grow the economy, we really shouldn’t have to have those discussions, “Flanagan said.
He says cutting business regulations and reducing costs for workers comp would also spur that growth.
The Republican’s plan is in contrast to a proposal by Majority Party Democrats in the Assembly. They want to make permanent a temporary tax surcharge on New Yorkers making more than a million dollars a year when it expires in 2017, as well as add new higher tax brackets for those who make over $5 million, and even higher for those who make over $10 million. Middle class taxpayers would also get a break, though by a smaller amount than the Republican plan. The state’s lowest earners would get a larger earned income tax credit, says Assembly Speaker Carl Heastie.
“For a long time this house has wanted to see a more progressive tax structure,” Heastie said in early February.
Senator Flanagan threw cold water on the Democrat’s plan.
“I was incredulous, given this economic environment,”said Flanagan. “How can you possibly do this, and say it with a straight face to the taxpayers?”
Neither house is likely to get all they want in tax policy- a negotiated state budget is due March 31st.