Finally, Higher Taxes for the 1% — Is Occupy Behind Governors' Moves to Make the Wealthy Pay Their Share?
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“The tax increase will raise $2 billion to pay for the middle-class tax break, a break in the New York City transit tax for small businesses, a public-private infrastructure repair fund, a tax break for manufacturers, and $50 million in aid to upstate communities trying to recover from historic flooding in the late summer. The funding is also expected to avoid another year of cuts to education and health care.”
Still, lots of observers are less than thrilled with Cuomo's deal. “Does it make the system more 'fair?' Yes. It does. That said, New York once had a very progressive tax code. That all got flattened in the last 30-40 years,” says Phillip Anderson, blogger at The Albany Project and veteran New York political activist. “This is a very small but not entirely insignificant step in the direction of fairness.”
Stamp notes, “The fact that he kind of did a 180 is a victory. But it is also a reform that is not going to really solve anything. We're going to have a deficit of four or five billion dollars; this is just going to be able to provide about $2 billion of that, and he's going to continue to cut schools.”
And Olivia Leirer, spokesperson for New York Communities for Change, says, “It's still a tax cut for millionaires. It doesn't cover the lost revenue for letting the millionaire's tax expire. It's going to lead to another nasty fight over the budget in the spring.”
The deal, in other words, lets Cuomo and Republican State Senate Majority Leader Dean Skelos claim to be looking out for the middle class and still point out to the very rich that it might have been worse. Occupy Albany was distributing flyers that called it “More of the Status-Cuomo” and said it was “$3 billion less revenue for the 99%.”
Yet Stamp points out that weeks ago, Cuomo had written off any suggestion that the millionaire's tax should be extended or that the rich should pay any more in taxes. “We can call this a quasi-victory,” she says. “The next steps are really making sure that we go big, making sure that we're protecting students, making sure we're protecting schools and hospitals.”
California Moves to Tax the Rich Too
Facing a projected $13 billion budget deficit, Gov. Brown has proposed a tax hike on those making $250,000 from 9.3 percent to 10.3 percent. Incomes between $300,000 and $500,000 would see the rate go to 10.8 percent. Incomes above $500,000 would pay 11.3 percent. Currently, Californians who make more than $1 million are taxed at 10.3 percent.
Brown's proposal would be a ballot initiative after he failed to gain approval from the state Legislature for $11 billion in taxes and fees. "I am going directly to the voters, because I don't want to get bogged down in partisan gridlock as happened this year," he said in a statement. California law requires two-thirds of the Legislature to agree on any increase in taxes, a near-impossible task when the state's Republican minority controls enough seats to simply dig in and refuse to pass anything. A ballot measure may be the only hope.
But Brown's plan also includes a statewide sales tax hike, to 7.75 percent from 7.25 percent, and the Courage Campaign, a California progressive advocacy group, estimates that it would cost the average Californian $123. “The sales tax is regressive, everybody knows that,” Rick Jacobs of the Courage Campaign says. “It certainly is hard to get a grassroots movement around raising the sales tax.”