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Cut Taxes

The Issue:

Taxes in New York are notably high, forcing manufacturers and residents alike to relocate outside the state. New York needs fiscal discipline to ensure budget balance and to provide a healthy environment in which our economy can grow. Tax cuts can and have done this by increasing savings for both businesses and individuals.

Spending restraint, though, is a necessary component of any fiscal policy that incorporates tax cuts. Inefficiencies in the state’s Medicaid program, for example, contribute a large amount to New York’s per capita government debt, putting greater pressure on the New York economy. For tax reductions to foster economic growth, the state government must reduce unnecessary spending.

However, certain state taxes are needlessly detrimental to manufacturers and business, particularly in Upstate New York. These taxes must be reformed or repealed immediately. In addition, particular unfunded mandates on local governments increase the tax burden facing these governments. Local and county governments are already straining under the burden of a slowed economy, recession-caused job losses, and growing demands for municipal services.

In Albany:

MACNY supports legislation that greatly reduces the tax burden in New York State and particularly opposes any new taxes at the state level. MACNY will therefore work to:

· Support immediate expensing of depreciable assets and repeal the corporate alternative minimum taxes.

· Repeal the corporate franchise tax and personal-income tax on manufacturers.

· Repeal the state-level estate tax.

· Support exemptions to sales taxes.

· Require a 2/3 “supermajority” vote in each house of the Legislature to enact any new tax or impose any new unfunded mandate on localities that would raise local taxes.

Talking Points:

· In 2004, Upstate New York’s tax burden was 22 percent above the national average, causing Upstate residents to pay over $5 billion more than if their tax burden merely matched the nation’s average. Local taxes in Upstate New York alone were 55 percent above the national average in 2004.

· Upstate New York employed approximately 93,500 more government employees than it would have if it kept pace with the rest of the nation. To top it off, New York has the second highest average salary for state employees in the entire nation, and in 51 New York counties, the average salary for state and local government jobs is above the average private-sector salary.

· New York attracted only 3.6 percent of nationwide manufacturing investment in 2004, much less than New York’s share of population, gross domestic product, or existing manufacturing employment.
· Estimates indicate that eliminating the corporate franchise tax will save manufacturers approximately $550 million.