Last night the Legislature and the Governor, in classic three-men-in-a-room fashion, passed a new tax bill complete with a unanimous Senate vote while the pages were still warm and no one had time to read them. You can see the resulting tax brackets here.
It's not precisely the "millionaire's tax" but it's also very different from the pre-2009 rates. Whether taxes on the rich have gone up or down depends on where you start counting from, giving the Murdoch papers and their friends room to complain about tax hikes while everyone else considers it a tax cut.
Might this change have something to do with calls for fairness and a shift away from the "inequality is good for you" models of the past coming from the Occupy movement, including the folks he doesn't want on his doorstep in Albany?
He said the Occupation protests had nothing to do with his change of heart.
"My job as governor is to make the best decisions I can at the time to meet the needs of the state at the time," Cuomo said. "The role of government is to try and help the people of the state, bring a direction for the circumstances of the moment."
Maybe. Meanwhile, one of his predecessors, a ghost I'm less than happy to invoke on this site, is telling a different story:
"Occupy Wall Street has won, not that they achieved changes in policy, but I think that they have had a demonstrable effect on political discourse: What we are talking about, and what the agenda is most like these days," Spitzer said.
Spitzer added that he believed that, before Occupy Wall Street, nobody was paying attention to equity issues, the distribution of income and the inherent unfairness of the current economic structure.
Somehow I think protesting had an impact on the political conversation, even as it makes the very serious people nervous. The Three Men in a Room seem to have noticed that the conversation around them is changing, even if they haven't changed much.
New York Governor Andrew Cuomo struck a deal with state legislative leaders to extend the so-called Millionaires' Tax and to replace New York's largely flat personal income tax structure with a more progressive structure. Coupled with the extension of the Millionaires' Tax is a tax cut for the middle class. Thus, average New Yorkers will see more money in their pockets, while the state nonetheless increases its revenue. And, remember, this comes with a divided legislature, where Democrats hold an overwhelming majority in the Assembly, but Republicans narrowly control the State Senate.
Over the course of the past couple of weeks we've been talking about how the War On Social Security was about to get under way and what happens when countries choose to privatize their systems.
Today we take on another bite-sized chunk of economic analysis: how can you get to a situation where Social Security is financially stable for the next 75 years?
We'll describe some proposals that are out there-but the big focus of this conversation will be to look at one change that, all by itself, could not only solve the entire funding problem, but could actually allow us to lower the Social Security tax rate, immediately, and still achieve fiscal balance.
"Well, if that's such a bright idea" you might ask, "why haven't we adopted it already?"
That's a great question-and after you hear the proposal, you may well have explanations of your own.
I've thought about this a lot-- I've even talked to you one-on-one. I don't think I'm going to be carrying your petitions next month.
I'm not saying "for sure" I won't. But that's my inclination right now.
I'm frustrated with Albany and while I think you're a good guy, I also think you're part of Albany. It's hard for me to judge how much you're trying to fix things from within and how much you're part of the problem because you live in that culture.
There are some things that you can do to convince me to carry your petitions. I'll talk about them after the flip: but it really boils down to: what are you going to do to fix New York State?
Yesterday, in the span of about an hour, I had the opportunity to speak to my Republican State Senator when I bumped into him and also with my Democratic Assemblyman at a town Democratic committee meeting.
No, I don't think I particularly want to name them. What I said to them is more or less mostly appropriate to say to pretty much every member (or at least every Upstate member) of the Legislature from both parties.
I've thought about what I said-- mostly, while I had been thinking of these issues for a while, the comments themselves were more or less impromptu.
I have a good friend who joined the Bureau a couple years ago. One of the things he says to his kids when they start misbehaving is "Be A Leader". If I had to sum up what I feel our Legislators and Governor need to do right now, that's it: Be A Leader.
Iowa, corn. Michigan, autos. Texas, oil. NY, Wall Street...We must stand behind the engine of our state's economy & strengthen it.
In his speech, the Governor pointed to Wall Street's impact on state finances:
In 2007 Wall Street finances provided 22 percent of the revenues in New York, more than one out of every five dollars in wages comes from Wall Street
Before going on to make the more questionable claim that "Wall Street capital is what is able to allow for what is on Main Street - small businesses creating jobs." Don't get me wrong - there have been times in our history when Wall Street was front and center in making our railroads work and building our industry, in ways that benefited small business. It's just, well, kind of been a while since the benefits were clear to folks outside of Wall Street. (Though perhaps Paterson has a case for small businesses in New York that sell directly to these folks.)
It seems lost on the Governor that his predecessor, his sins aside, became Governor of New York precisely because he was willing to challenge Wall Street, not cheer them on. Spitzer argued that the "engine of our state's economy" should be well-tuned, operating within legal limits, and made his case despite that industry having a lot of friends inside and outside of the state.
I didn't have a lot of hope remaining for Paterson, but did he really need to sell out this severely? Is he that short of campaign donations?
I just received this press release from Senator Craig Johnson's office announcing a hearing on the non-collection of Indian cigarette taxes:
The Senate Standing Committee on Investigations & Government Operations will be holding a hearing on the state's inability to collect taxes from cigarettes sold to Non-Native Americans that originate from Indian Reservations Oct. 27 at Manhattan Community College, the committee's chairman, Senator Craig M. Johnson announced.
The hearing will begin 10:30 a.m. at the college's Richard Harris Terrace Building, 199 Chambers St., New York, NY.
"The failure to secure this badly needed revenue continues as other states - most recently Florida - have been able to reach tax collection agreements with their local Native American nations," Senator Johnson, (D-Nassau), said. "This committee wants to be helpful in crafting a solution to this problem, but first we - and the public - need to be apprised of where the state and the nations stand."
According to the state Office of the Budget, the failure to collect this revenue is costing New York $65 million this year.
Years after the courts affirmed a state's right to collect taxes generated by the sale of cigarettes by Native Americans to non-Native Americans at licensed "smokeshops" and over the Internet, the state Department of Taxation and Finance has been stymied in its tax collection efforts. This non-collection issue persists despite a law passed last year that required these taxes to be collected.
There has also been concern that the current situation has made it easier for criminal activities, such as bootlegging and the sale of counterfeit cigarettes, to flourish. Recently, the United States Attorney for the Eastern District of New York has pursued suspected cigarette smugglers associated with the Poospatuck Tribe. This network's alleged ringleader, Rodney Morrison, is currently facing serious criminal charges in federal court.
I have a few problems with this hearing.
For starters, it is taking place in New York City. I am not an expert on Indian reservations in New York, but I would be curious to see (or hear) how many reservations are located in Manhattan AND how many people in Manhattan get their cigarettes from those reservations.
This hearing should be in western New York, which has long been the battleground for the debate over whether or not to tax cigarettes sold on native land. I can drive 10 minutes to the reservation where there are multiple stores to purchase cigarettes. Others in this area of upstate New York can say the same. So hopefully this isn't the only hearing that will be held. There are a lot more people up here who are interested in this than there are in New York City. I am certain of it.
Also, I don't have a problem with the principle of this. I have mixed feelings on taxing cigarettes sold on native land. But I do have a problem with this if it being used as a revenue tool during a budget crisis only to cover other budget woes that should be addressed first.
I would like to see a hearing here in WNY on this issue. It would be important and considering the large Indian population here, it would be helpful (and thoughtful) to have such a hearing here so we can hear all sides.
Whether or not the economy falls off another cliff, New York has a problem. The social contract for our country is tearing, in ways that seem likely to spell doom for the class of financial engineers who've raked in as much as they can while telling us all there was little risk involved.
Note in particular the key date where those lines turn upward: 1980.
Remember Times Square in the 1970s? Or at least Taxi Driver? Those were some bleak days for New York City, which had lost key pieces of its formerly diversified base as a port and manufacturing center. Manhattan used to have amazingly interlinked collection of small factories, which had disappeared during the postwar era. The Port of New York used to dominate the country from its key location, first on the Erie Canal and then on the railroads. As that went away (and wasn't replaced), the city had some large problems, including its own need for a bailout.
New York did still have a few big things, though: fashion, media, and finance. All of them added to the city's mystique and drew Richard Florida's beloved "creative class" in droves. I don't think, though, that the creative class was what revived New York. Fashion continues, but seems pretty stable. Media continues, though some of its most classically New York-oriented aspects, especially publishing, are in steady decline. Advertising may even be in danger.
What made New York's revival possible, I'd argue, is the gusher of cash that came in from Wall Street. True, not all of that money went to New York - a lot went to Charlotte, San Francisco, and banking capitals all over the county. Even locally, a lot of it went to Connecticut and New Jersey. Even after that, though, finance was pumping money into New York - real estate, charitable donations, conspicuous consumption of every variety. Some of that even still flows in ways that startle those of us who aren't used to it, but the echoes of the past seem even crazier. ("$10,000 to $15,000 to spend on a Saturday afternoon"? Really?)
Most of us weren't out there spending thousands of dollars before nightfall, but that kind of absurdity brought a lot of life back to New York, making Manhattan buzz in ways in hadn't since about, oh, the 1920s...
And even if we weren't in New York City, we all benefited from the taxes - low though they were - on this nonsense. These Masters of the Universe never really were, but for a while they let us pretend that maybe we were more in control of our own universe.
The culture of Wall Street hubris has to crash, for the good of the country. I don't think the people on the inside of it have begun to realize the damage they've done, both to the national and international economies and to their fellow citizens' tolerance of their high-roller ways.
But as that comes down, what are we in New York, both City and State, going to do to fill those economic gaps? What can we do that's more sustainable, less parasitic, and able to survive in this newly challenging environment?
I don't imagine that we'll find a new sector that can skyrocket the way that finance did over the past twenty years. The accumulated wealth from that crazy period will buffer things for a while. Somehow, as we (and Wall Street) come to adjust to that brave new world, though, we're going to have to figure how to keep ourselves going on a whole lot less.
It appears that deal has been reached to ask a bit more of those New Yorkers who can most afford it instead of balancing the state's budget on the backs of the poor and middle class. Liz has the scoop.
There is a tentative three-way deal on hiking the personal income tax on wealthy New Yorkers, multiple Democratic sources confirm.
The agreement - assuming it holds - sets up the following three tiers:
- $300,000 to $500,000: 7.97 percent.
- $500,000 to $1 million: 8.47 percent.
- $1 million and above: 8.97 percent.
This increase will sunset in five years.
The current top rate is 6.85 percent for those who make $40,000 and above.
I'd add the Working Families Party to the winners column along with the Assembly Democrats and I agree with Liz that the losers column includes The Governor, The Mayor and the Senate Majority Leader.
Good news from Albany. Hopefully this "tentative" deal will hold.
Unshackle Upstate's Brian Sampson is making the news circuit these last few weeks with the message that Fair Share Tax Reform would cause small businesses to fire workers (the Fair Share Tax Reform is making progress in Albany with bills that would create new NYS marginal tax brackets starting at $250,000). He says that 75% of small business owners pay taxes through personal income tax.
Ok, sounds like a reasonable concern, right?
Meanwhile, back in the reality-based community According to James Parrott, of the Fiscal Policy Institute, "only 1.4% of tax units with small business income were in the top two federal tax brackets, i.e., over $250K." The VAST majority of small business owners don't make that kind of money and therefore would never be subject to the Fair Share tax.
And let's think about Unshackle Upstate's logic for a minute. Imagine you are one of the rare group of small business owners netting over $250,000. The new Fair Share Tax Reform tax bracket costs you about $70 a week extra. Are you going to fire a worker to recoup that seventy bucks?
The good news is that Sampson's disingenuous media forays are the last gasps of a sinking trickle down theory. Wanna see a New Yorker laugh in your face? Tell them that tax breaks for the rich create jobs.
Do you pay the same tax rate as millionaires like Donald Trump and Bernie Madoff?
The answer may surprise you. The WFP hit the streets to see if New Yorkers knew just how little you have to make to be in the state's highest tax bracket.
Even while President Obama works to make America's taxes fairer, New York's tax code is anything but. Over the last 30 years, the rich have seen their state taxes cut in half. Today, janitors and cab drivers pay the same state tax rate as Wall Street bankers.
It's not just unfair--with the state facing a $14 billion budget gap and devastating cuts to hospitals and nursing homes, it's madness.
Sen. Liz Krueger, who serves as the vice-chair of the Senate Finance Committee and chairwoman of the Select Committee on Budget and Tax Reform, will be presiding over a public hearing on Thursday that will feature testimony focusing on making taxation in New York more progressive.
The public hearing will include economists that will offer their proposals and thoughts on how to make taxes in New York more progressive.
But the committee doesn't want to limit the testimony they hear to the experts. They want to hear from the taxpayers of New York.
Anyone who is interested in testifying can submit their remarks via e-mail to budgetandtaxreform@senate.state.ny.us. Also, if you are interested in attending the hearing, here are the details on the place and time of the hearing.
Empire State Plaza Convention Center
Meeting Room 4
Albany, NY
Meeting starts at noon
This is a great opportunity for members of the New York State Senate to hear from the citizens of this state regarding our tax system and how to make it more progressive. We need to deviate from the current regressive system of taxation that is rampant in this state. Being more progressive is what New York needs. Hopefully, this hearing will be just what we need to get a great dialogue going about our broken tax system.
The Senate Dems are preparing to conference the fair Share Tax Reform Act of 2009, a bill also known as the "Millionaire's Tax". It was introduced by Senator Schneiderman and had 18 total sponsors signed on in support.
Until now. It seems the bill has picked up two more sponsors ahead of tonight's meeting.
As the Senate Democrats prepare to conference the question of tax reform at 6 p.m. this evening, the so-called Fair Share bill being pushed by the WFP and its labor allies is gaining steam in both houses of the Legislature.
In the Senate, two more Democrats - Tom Duane and Martin Dilan - have signed on as co-sponsors of the bill, bringing the total number of supporters to 20, according to the WFP's Bill Lipton.
...
In the Assembly, a same-as bill is being carried by Assemblyman Darryl Towns, chairman of the 48-member Black, Puerto Rican, Hispanic, and Asian Legislative Caucus.
Towns introduced the bill earlier this week and has garnered the support of 30 of his colleagues.
"It's critically important that we solve the budget crisis through real shared sacrifice," Towns said in a statement relayed to me by a labor supporter of the bill. "Fair Share Tax Reform will make New York's tax code more equitable and will also raise revenue necessary to protect essential services."
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.
Phillip had the story yesterday regarding the introduction of the Fair Share Tax Reform Act of 2009 in the New York State Senate. The bill's sponsor, Sen. Eric Schneiderman, introduced the legislation yesterday and was joined by 18 co-sponsors who are advocating for this legislation.
So what is Fair Share Tax Reform? It will provide much-needed reform to the state's tax system that, under the current system, charges the same marginal tax rate if your household income is $40,000 or $4 million. Doesn't sound too fair, right? That is where these reforms come into play.
Under the Fair Share Tax Reform Act of 2009, the following would change:
- If you make $250,000 or more, your tax rate will go from 6.85 percent to 8.25 percent - a 1.4 percent increase. Just from that increase alone, an estimated $568 million of new revenue will be generated.
- If you make $500,000 or more, the tax rate will increase to 8.97 percent - a 2.12 percent increase. That increase will create $823 million in new revenue.
- If you make $1 million or more, your tax rate will be set at 10.3 percent. That is an increase of 3.45 percent. This increase (you could consider this portion of the bill the "millionaires tax") will bring in an estimated $4.6 billion in new revenue.
- In all, an estimated $6 billion could be made just from this one piece of legislation.
Some of the state senators who have backed this legislation supplied statements yesterday showing their support for the Fair Share Tax Reform Act of 2009.
"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."
"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."
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."
I find the Fair Share Tax Reform Act of 2009 the perfect solution to the tax problems we have and a great way to address flaws in the system that have existed for years. Hopefully, both houses of the New York State Legislature can get behind this bill and give it the support it needs and deserves.
As the state Legislature debates whether to raise income taxes on millionaires, there is also talk of developing a new income-tax system that increases taxes on the wealthy and provides tax breaks to the middle class.
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Senate Democrats in particular have been lukewarm to the idea of raising income taxes on millionaires alone, which is being pressed by Assembly Speaker Sheldon Silver, D-Manhattan.
Instead, Senate Democrats may look to reform the state income-tax structure so wealthy New Yorkers pay more, but the middle-class gets a tax break.
"This is an opportunity for us to develop a fairer tax system in New York," said Senate Deputy Majority Leader Jeff Klein, D-Bronx. "Any plan should include putting more money back into the pockets of the middle class."
Sen. Eric Schneiderman, D-Manhattan, said it's unclear whether a tax cut would be feasible in the face of the state's $13 billion budget deficit.
But, he said, "In addition to the fact that we're looking to raise revenue to deal with the deficit, there are a lot of us who view the state tax system as out of whack and would like to restore some progressivity as part of this process as well."
Restoring "progessivity" to the New York tax code would be a very good thing indeed. I guess the question is, can New York afford a middle class tax cut in the face of growing budget deficit and would raising rates at the top make up the difference?
As Phillip told us yesterday, New York City Mayor Michael Bloomberg is proposing a hike in the sales tax and cutting 23,000 jobs. Bloomberg's approach is similar to that of Governor David Paterson, who is also proposing minor tax hikes and cuts that will affect many state agencies.
Here is some reaction from a number of New York City-area publications and news outlets.
Ever since he stormed to re-election in 2005 with surprising union support, Mayor Michael R. Bloomberg has enjoyed unusually warm relations with organized labor, negotiating contracts that critics have called overly generous.
On Friday, though, Mr. Bloomberg began to push in the other direction, if gently, declaring in his budget address that if the city's pension and health benefits systems were not reformed, "we'll fundamentally bankrupt big municipalities like us."
Yet it doesn't count on another $1 billion-plus in that same bill for school funding, supposedly because it would be funneled through Albany and could be siphoned off.
If that school money comes through after all, Bloomberg's threat to cut 14,000 teachers is instantly moot.
Of course, that threat is as much a bargaining position as a serious piece of number-crunching. It is starred in the budget book with an asterisk that might as well be an arrow pointed straight at Gov. Paterson.
The governor's budget cuts $771 million from city school aid. Rather than spread that through different parts of the sprawling Education Department, Bloomberg said every dime of that loss will have to come out of a teacher's hide, blamed on the governor.
Coping with a severe economic downturn, Mayor Bloomberg yesterday unveiled a bare-bones budget for next year that raises taxes and fees that will hit virtually all city residents while putting the squeeze on every city agency.
The city is in a jam because revenues are expected to tumble by $5 billion, or 13 percent, between 2008 and 2010, he explained in a detailed, 90-minute budget presentation at City Hall.
"You can only get so much blood out of a stone" with budget cuts and other measures, the mayor said.
(This is a column written by David Sirota. I am on his e-mail list and get his columns regularly and they are a great read. This one has a New York mention in it and makes a great case for a millionaires tax.)
For most of us, Benjamin Franklin's words in 1789 still apply: "Nothing is certain but death and taxes."
However, millionaires, by definition, are not most of us. While they can't stave off the grim reaper, they can convince lawmakers to shield them from the taxman and balance budgets on the backs of everyone else.
That's what's going on in revenue-starved states right now: governors are preparing to slash middle-class programs and are resisting calls to raise taxes on the wealthy. Nowhere is this class war more pronounced than in New York - the home of the financial thieves who killed the economy.
Having halved its top tax rate over the last three decades, New York today faces a $15.4 billion deficit. In response, Democratic Gov. David Paterson might have asked his state's Gordon Gekkos to pay higher taxes, especially considering the idea's popularity in polls and the news that Wall Street's elite are still swimming in money. Indeed, according to CBS News, the allegedly beleaguered financial industry is so flush with cash it plans to dole out $14 billion in executive bonuses this year.
Yet, far from forcing robber barons to pay their fair share, Paterson told The New York Times that taxing millionaires is "the last place you want to go." Instead, he proposes to punish Joe and Jane Six-pack by hiking the taxes and cutting the programs that disproportionately impact them. Specifically, he wants to increase sales taxes, college tuitions and licensing fees and slash education and low-income health programs.
One of Governor David Paterson's proposals in the 2009-10 Executive Budget is the so-called "Obesity Tax", which would tax non-diet sodas and drinks with less than 70 percent fruit juice. This has drawn criticism, not necessarily because of the governor's intent, but because it is part of many fees and taxes that have been increased in an effort to create revenue.
In an effort to make a case for the obesity tax, Governor Paterson wrote a commentary on CNN discussing why he is supporting an obesity tax and why an obesity tax is necessary.
Like many New Yorkers, I remember a time when nearly everyone smoked. In 1950, Collier's reported that more than three-quarters of adult men smoked. This epidemic had a devastating and long-lasting impact on public health.
Today, we find ourselves in the midst of a new public health epidemic: childhood obesity.
What smoking was to my parents' generation, obesity is to my children's generation. Nearly one out of every four New Yorkers under the age of 18 is obese. In many high-poverty areas, the rate is closer to one out of three.
That is why, in the state budget I presented last Tuesday, I proposed a tax on sugared beverages like soda. Research has demonstrated that soft-drink consumption is one of the main drivers of childhood obesity.
Paterson goes on to argue that the obesity tax would do for childhood obesity what taxes on cigarettes did for smoking-related health issues.
These taxes may be unpopular, but their benefits are undeniable. Last month, the Centers for Disease Control and Prevention reported that, for the first time in generations, fewer than 20 percent of Americans smoked. Lung cancer rates have finally begun to decline. As a result, we are all healthier.
Just as the cigarette tax has helped reduce the number of smokers and smoking-related deaths, a tax on highly caloric, non-nutritional beverages can help reduce the prevalence of obesity.
To address the obesity crisis, we need more than just a surcharge on soda. We need to take junk food out of our schools. We need to encourage our children to exercise more. And we need to increase the availability of healthy food in underserved communities.
I don't necessarily oppose the obesity tax. I just oppose the vast number of fees and taxes that are being pushed that would have more of an impact on the middle class in New York than they would on the rich. The middle class doesn't need to be taxed anymore. We are being taxed right out of this state.
"Shared sacrifice" is a phrase that has been tossed around a lot, but it holds true meaning in this debate. There needs to be "shared sacrifice." If you are going to increase fees and taxes on the middle class, you should do it for the wealthy too.
