Let's cut right to the chase: Fair Share Tax Reform (FSTR) is the way to go. It would provide progressive reforms to the state's marginal tax rate that stands at 6.85 percent for everyone. So if you make $40,000, you are paying the same rate - 6.85 percent - as someone making $400,000 or $4 million.
Klein's proposal doubles the standard deduction for every type of tax filer and provides a tax cut in the form of a debit card to ensure spending (the standard deduction is a dollar amount reduced from one's total taxable income, thereby reducing their tax liability). Currently, a single person with an adjusted gross income of $60,000 can deduct $7,500 from their income, resulting in taxes on $52,500 of the filer's income rather than $60,000. Under the Senator's plan, the standard deduction would increase to $15,000 for a single person, resulting in taxes on $45,000 of the filer's income rather than $60,000.
"This is an opportunity to reform an antiquated tax system and start a conversation about creating a system which is more fair and equitable. We need to provide real relief and recovery for middle income New Yorkers who need it the most, while at the same time seeking solutions to generate revenue," said Klein
Klein's proposal also increases taxes on individuals making more than 250K/year with rates increasing from 6.85 to 8.97 percent for millionaires and 10.3 percent for income above $3 million.
Whether single married or retired, households making less than 250K would receive tax cuts ranging from $466 to $1,165 in the form of a debit card. Individuals will be able to use the debit card as they would a gift card- solely for spending, thereby stimulating the economy. The cards will have an expiration date in 2009, as determined by the Dept. of Taxation and Finance, with unspent money reverting back to the state.
Klein's plan isn't necessarily bad, but it's far from the best plan. Fair Share Tax Reform is the way to go. While Klein's plan would bring in an estimated $1 billion in revenue for the state, Fair Share Tax Reform would bring in $6 billion by raising the marginal tax rate on those making $250,000, $500,000 and $1 million.
The stimulus part of Klein's plan is interesting, but I don't see how that would be successful. We need tax reform in this state. We don't need anymore band-aids. While it is honorable for Klein to come up with his own plan, it isn't smart to give everyone a band-aid and say that you are "stimulating" the economy.
Now that thirty years of deregulation and tax cuts for the wealthy have failed so spectacularly, creating an economic catastrophe in its wake, the American people are beginning to recognize conservative economic policy for what it is: a disastrous recipe for privatizing profits and socializing costs, and shifting the economic burden to the poor and middle class.
But with 46 states facing budget shortfalls it is clear that conservative orthodoxy is still alive and holding sway in too many statehouses. Too often, the emphasis isn't on change we can believe in -- but on the same old cutting of services that people need rather than raising taxes on the rich who have disproportionately benefited from fiscal policy over these many decades.
We certainly see this short-sighted and proven wrong approach being pushed in New York. The state is confronting a budget deficit of $15 billion, and Governor Paterson has proposed $9 billion of harsh cuts in education, healthcare and social services, and $5 billion in new taxes that would hit the struggling poor and middle-class the hardest -- making an already regressive tax system even more so.
For generations, politicians across the spectrum have claimed to appeal to the "middle class." They have touted their "middle class values" and asserted that their programs - and only their programs - would benefit this "middle class." The problem is, nobody has bothered to define exactly what the "middle class" is. To complicate things even further, most polls show that the overwhelming majority of Americans consider themselves to be "middle class."
By dividing Americans into "lower," "middle" and "upper" classes, we get what is probably the broadest definition of "middle class." Under this definition (which we haven't yet completed), one-third of all Americans are "middle class." The simplest methods for dividing us are by income or by wealth. Since wealth is not only far more difficult to determine, and also far more variable (witness the tremendous wealth losses experienced in just the past few months), let us define "middle class" according to household income.
In the interest of full disclosure, I am on DMI's Netroots Advisory Council and I did a some (very minor) consulting on this project.
The good folks at the Drum Major Institute have outdone themselves. For years, DMI has produced its "Middle Class Scorecard", grading every member of Congress on their votes on bills affecting the middle class. Today they have launched themiddleclass.org, which takes their efforts to a whole new level. From the DMI Blog:
Dream with me for a minute. Imagine that we-the-people could easily find out how our members of Congress voted on the bills that are most important to us. Imagine that there was a place that explained clearly and simply how those votes really impact America's current and aspiring middle class.
And, while we're dreaming, imagine that Congress knew that Americans of all walks of life could keep an eye on them, comparing their rhetoric in favor of strengthening and expanding the middle class with their votes.
With TheMiddleClass.org, you can check throughout the year for our signature DMI analysis of key legislation as members vote on it. You can track the scores of each member in the lead-up to the release of their final 2007 specific grade. And, you can easily build a custom widget for your own website, where you can share the information that matters most to you.
For example,
Want to learn more about the SCHIP bill?Click here.
Want to know how Montana's state delegation voted on it?Click here.
Want to know how Senator Max Baucus voted on this bill, and others?Click here.
I've often said that nobody, but nobody does more with less than DMI. Today they prove me right once again.
(From Amy Traub at DMIBlog)
At the beginning of the month, I wrote an op-ed for the Albany Times-Union challenging the conventional wisdom that the year's legislative session was largely a failure. I pointed out that on issues important to most current and aspiring middle-class New Yorkers, Albany has made significant progress: hundreds of thousands of low-income kids are becoming eligible for state health insurance, underserved schools are finally getting resources they've needed for decades, and new groups of employees are eligible to organize themselves for a fair deal at work. I argued that by minimizing these substantial policy victories for ordinary New Yorkers, we risk feeding into dangerous myths that nothing of substance is ever accomplished in the state capitol.
But like so many policies crucial to the city's fate, congestion pricing requires approval from Albany before it can be implemented. Governor Spitzer supports the plan. The State Senate passed legislation to implement it. But the State Assembly has refused to act, despite the fact that $500 million in federal transportation funding may depend on quick action.
Today a new report (not yet available online) released by the Assembly Committee on Corporations, Authorities, and Commissions, chaired by Richard Brodsky, sheds some light on the Assembly's disagreement with the plan. Unfortunately, at a time when New Yorkers need a serious discussion about the city’s growth over the next 25 years, about how we will deal with clogged streets, poor air quality, underfunded mass transit system, and the threat of global warming, the Assemblyman Brodsky's report instead offers a grab bag of critiques that fail to understand crucial aspects of PlaNYC 2030 and the congestion pricing plan specifically.
First of all, it is absurd to describe a plan that would massively redistribute resources from drivers, who have a higher average income, to transit riders, many of whom who have very low incomes, as regressive. By proceeding as though the right to drive a private car cheaply into Manhattan were an evenly distributed "public good" to begin with, Assemblyman Brodsky fails to notice the millions of New Yorkers trying to work their way into the middle class who don't own cars and have no choice but to take mass transit, no matter how poor the quality. These New Yorkers are among those with the most to gain from congestion pricing and the nearly half a billion dollars in transit investment it would generate annually.
"Equity" cannot be defined as everyone having a chance to engage in behavior that has inherently inequitable impacts. As demonstrated in DMI's recent report, "Congestion Pricing: Good Policy for New York’s Middle Class," congestion itself disproportionately impacts the city's current and aspiring middle class. Middle-class New Yorkers already pay price for congestion with poor health, environmental damage, lower quality of life, and less economic growth, even though the majority of them never drive a car into midtown Manhattan.
Assemblyman Brodsky's critique systematically overlooks the negative impact of driving cars as compared to other means of transportation. Despite the fact that concern about reducing greenhouse gases is a major motivation for the congestion pricing plan, no reference to climate change or global warming can be found anywhere in the Committee report.
As an alternative to congestion pricing, Assemblyman Brodsky suggests we consider a far more regressive plan -- raising fees on mass transit riders (that is, "time of day pricing on mass transit.") Not only would this proposal disproportionately burden lower-income transit riders, it would do little to alleviate congestion in our streets, would not improve air quality, and would worsen global warming by discouraging New Yorkers from taking less-polluting mass transit. Suggesting an increase in mass transit fees as an alternative to congestion pricing shows that Assemblyman Brodsky fundamentally misunderstands the aims of the congestion pricing plan.
Here is some more video I shot for DMI at their conference on NYC's endangered middle class. In this segment you'll see statements from Rep Anthony Weiner (NY-9), Bronx Borough President Adolfo Carrion and City Council member John Liu.
Here's some video highlights I made of Mario Cuomo's keynote address to the Drum Major Institute's conference on NYC's Middle Class yesterday. I'll have more on the conference and more video of other participants including Rep Anthony Weiner, Bronx Borough President Adolfo Carrion, NYC Comptroller William Thompson, NYC Finance Director Martha Stark (a total rockstar, btw) and more later today.
I'm at Drum Major Institute's conference The American Dream in the Big Apple
Is New York City still a middle-class town? at Baruch College this morning. Former Governor Mario Cuomo gave the keynote address this morning and it was a barnburner. I'll have video up later today. There have a been some great panels so far and it's fun to look at each one ask, "How many folks on this panel aren't running for mayor?"
