Job Creation Incentives and Minimum Wage Increase-An End-of-Session Update

Posted on June 12, 2012 by NYSAC

As Albany enters the final two weeks of legislative session, two differing proposals intended to stimulate the economy dominate the agenda.

Recently the Senate passed S.7448, a job creation plan which includes a series of tax credits. Along with this proposal, the Senate passed a bill imposing a State spending cap (S.716), as well as a constitutional amendment to help prevent future tax increases (S.1919-A). Meanwhile, the Assembly is pushing for a proposal to raise the minimum wage from $7.25 to $8.50 per hour, and further tying the rate to inflation each year. The measure, already passed by the Assembly, is unpopular with the majority of Senators.

While polls show that increasing the minimum wage is gaining popularity, they also indicate that the public believes the increase would cause small businesses to reduce their number of employees. The Governor has voiced support for a minimum wage increase, but says lawmakers are too deeply divided to come to a consensus this year.

With legislative session scheduled to end on June 21st, lawmakers have only eight scheduled session days remaining in order to negotiate an agreement on this or other issues. While other end-of-session priorities haven’t been made clear, there has been little indication that a package of mandate relief proposals will be taken up by the legislature by the end of June. (Katy Vescio)

Mayday for Mandate Relief Gets Attention

Mayday is an international call for help, and during the Month of May counties across the state participated in Mayday for Mandate Relief to call on the State for much-needed help through mandate relief measures. County leaders and taxpayers across the state held the spotlight on the State mandated programs that continue to consume property tax dollars and curtail critical local services that contribute to New York State’s excellent quality of life. Read more…

Help Enact Mandate Relief Now

NYSAC has launched a new webpage, http://www.mandaterelief.com, designed to help New Yorker’s urge their State Lawmakers to enact mandate relief. The page offers a 3-step form that enables county officials and their residents to easily email their State Senators and Assemblymembers. Read more…

NOW LET’S TAKE A LOOK AT WHY ALTHOUGH IN THE LAST 2 YEARS NY HAS TAKEN SOME STEPS IN THE RIGHT DIRECTION, WE ARE STILL LIVING IN ONE OF THE LEAST FREE, AND MOST ECONOMICALLY OPPRESSED, STATES IN THE NATION. WE HAVE A TAX CAP BUT NOT THE MANDATE RELIEF TO ACCOMPANY IT, THE MOST COSTLY AND LAVISH MEDICAID SYSTEM IN THE NATION STILL UNREFORMED, AND WE CONTINUE TO HAVE SOME OF THE HIGHEST TAX, REGULATORY BURDEN, ANTI-BUSINESS, GOVERNMENT LAYERED, OVERLY UNIONIZED (PUBLIC SECTOR), UNSUSTAINABLE PUBLIC PENSION, OVER LEGISLATED, HEAVY HANDED SYSTEMS IN THE COUNTRY. WE ALSO CONTINUE TO SUFFER THE GREATEST MASS EXODUS OF PEOPLE, PROSPERITY, PRODUCTIVITY, AND WEALTH OF ANY STATE IN THE NATION. SO DESPITE SOME SUCCESSES, WE’VE REALLY BARELY SCRATCHED THE SURFACE TO RESOLVE THESE ISSUES AND HAVE A LONG WAY TO GO TO FISCAL SANITY, WHICH WE APPARENTLY WON’T BE MUCH CLOSER TO AS THE CURRENT SESSION ENDS:

The facts on New York’s Tax Climate

State Individual Income Tax Collections Per Capita, Fiscal Year 2010 – $1,796 – Highest in the nation!

8.82% Individual Income Tax (Eight brackets)

7.1% Corporate Income Tax (Flat Rate)

7% Sales Tax (Statewide 4% plus all counties at least 3%, some higher.)

$2,136 Property Tax Collections Per Capita

New York’s Individual Income Tax System New York’s personal income tax system consists of seven brackets with a top rate of 8.82%, kicking in at an income level of $10,000,000. Among states levying personal income taxes, this top rate ranks the state 7th highest nationally. New York’s 2010 state-level individual income tax collections were $1,796 per person, which ranked 1st highest in the nation.

50-State Table of Individual Income Tax Rates

50-State Table of State Individual Income Tax Collections

50-State Table of State and Local Individual Income Tax Collections Per Capita

New York’s Corporate Income Tax System New York’s corporate tax structure is composed of a flat rate of 7.1% on all corporate income. Among states levying corporate income taxes, New York’s rate ranks 24th highest. In 2010, state-level corporate tax collections (excluding local taxes) were $201 per capita and ranked 7th highest nationally.

50-State Table of Corporate Income Tax Rates

50-State Table of State and Local Corporate Income Tax Collections Per Capita

50-State Table of State Corporate Income Tax Collections Per Capita

New York Sales and Excise Taxes New York levies a 4% general sales or use tax on consumers, below the national median of 6% [but localities are permitted to levy their own high sales taxes]. In 2009, New York’s state and local governments collected $1,170 per person in general sales taxes and $580 in excise taxes per person, for a combined figure of $1,750, which ranks 6th highest nationally. New York’s gasoline tax stands at 49 cents per gallon-the highest gas tax in the nation. New York’s cigarette tax stands at $4.35 per pack of twenty-the highest nationally. Cell phone taxes in New York are the 3rd highest in the nation. The sales tax was adopted in 1951, the gasoline tax in 1923 and the cigarette tax in 1941.

50-State Table of State and Local General and Selective Sales Tax Collections Per Capita

New York Property Taxes among Nation’s Highest New York’s local governments collected $2,136 per capita in property taxes during fiscal year 2009, which is the latest year the Census Bureau published state-by-state property tax collections. New York is one of the13 states that collect no state-level property taxes. Its per capita property tax collections in FY2009 rank 5th nationally. State and Local Property Tax Collections Per Capita by State

May 17, 2011 By:Richard Morrison – Today we released a new report on property tax burdens nationwide by analyst Nick Kasprak, “New York, New Jersey Lead Nation in Property Tax Burden,” which uses the latest data from the U.S. Census Bureau to rank virtually all counties nationwide. Not surprisingly, several counties in New York and New Jersey come out on top of this list. Both states are known for their high state and local tax burdens in general (#2 and #1, respectively), and their high property taxes in particular. The new report ranks counties on three different metrics; by median property taxes paid on homes, by median property taxes as a percentage of median home values, and by median property taxes as a percentage of median household income.

Tax Freedom Day Arrives on May 1 in New York

Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2012, New York taxpayers work until May 1 (ranked 2nd nationally) to pay their total tax bill. Full study of Tax Freedom Day, nationwide and in each state

New York’s State and Local Tax Burden Second-Highest in Nation

During the past three decades, New York’s state and local tax burden percentage has ranked among the nation’s highest, currently estimated at 12.1% of income (2nd nationally), above the current national average of 9.8%. Compared to the 1977 data, New York had a rate of 13.2% (1st nationally), decreasing 1.1% overall. Currently residents pay $6,157 per capita in state and local taxes.New York’s State-Local Tax Burden, 1977-Present (Since 1977 NY has only managed not to be the worst in the country 4 times, however in each case NY was still the 2nd or 3rd worst)

Map of U.S. Showing all State’s Burdens and Ranks

New York’s 2012 Business Tax Climate Ranks 49th

New York ranks 49th in the Tax Foundation’s State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. 50-State Comparison of Business Tax Climates (data only) 2012 State Business Tax Climate Index, Ninth Edition (full study)

Are New Yorkers Fleeing Higher Taxes?

May 30, 2012 By: Richard Morrison – This week we’ve been getting a lot of renewed attention for our State Migration Data Tool, the application that lets you see how many people have moved in and out of your state over the last decade, and how much income has flowed in or out with them. Many folks in New York, for example, have been surprised by the number of people leaving their state and the amount of money those exiles have been taking with them. Nicole Danna and Erik Kriss of the New York Post reported on the issue today:

New York state tops the nation in one key export — people fleeing high taxes.

More than 3.4 million New Yorkers — with combined annual earnings of $119 billion — pulled up stakes and left for other states from 2000 through 2009, according to the Tax Foundation.

The top destination: Florida, where 600,000 New Yorkers landed after leaving the high-taxes of the Empire State in the last decade — taking nearly $20 billion in income with them, new data shows.

[…] Foundation analyst Nick Kasprak said taxes play a role in people’s decisions to relocate.

“You generally see people moving from higher-tax states to lower-tax states,” he said. “Certainly, taxes are one way that states compete with one another.”

Florida wins that competition with New York hands down. It has no income tax and no estate tax.

More stories on the state-to-state migration question have appeared this week citing the Tax Foundation’s work, including “Escape From New York? High-Taxing Empire State Loses 3.4 Million Residents in 10 Years” and “New York, Other High-Tax States Losing Residents.” Tax Foundation president Scott Hodge also put the migration issue in the context of the debate over a certain Facebook co-founder’s U.S. tax liability in the post “Is Eduardo Saverin Any Different From Rich New York Snowbirds?

New York Faces Public Pension Challenge Despite Good Management and Being Fully Funded

January 21, 2011 By:Joseph Henchman – The Empire Center for New York State Policy has a public pension calculator feature on its website. Input your target retirement age, years worked, and final average salary, and find out what your pension benefit would be if you were a public employee.

Josh Barro of the Manhattan Institute explains why the problem in New York and other states isn’t just mismanagement or the collapse of the stock market, but inherent problems with public defined-benefit plans:

Take my home state of New York. We came into the recession with some of the best-funded pension plans in the country: we made our required pension contributions every year and were 100 percent funded, if you follow the overly-rosy accounting practices that public pensions are allowed to use. Pension management practices were by most accounts appropriate, notwithstanding a pay-to-play scandal in one of the state’s pension systems.

Yet, pension contribution rates are skyrocketing and will continue to do so. By 2015, pension payments by school districts will more than quadruple from their levels in 2010, requiring a property tax increase of 18 percent just to pay for higher pension costs.[…]

The fundamental reason for the pension mess is that nearly three decades of bull markets made pensions look cheaper than they really were, and led lawmakers to hand out pensions that were unaffordable except when bolstered by lucky investment returns.[…]

It is not atypical for a full-career teacher working in a suburban district downstate to retire at 59 with a pension of nearly $80,000 per year, adjusted annually for cost of living. That pension is not subject to state and local taxes and, unlike many private-sector pensions, does not include an offset for Social Security benefits. Buying an equivalent annuity would cost you more than $1.5 million.[…]

(YEH, YEH; ALL THAT BEING SAID LET’S GET TO THE BOTTOM LINE! THE ONLY REASON THAT PENSIONS ARE AT PRESENT FULLY FUNDED IS BECAUSE THE STATE COMPTROLLER HAS JACKED UP THE EMPLOYER CONTRIBUTION RATES, THE EMPLOYER BEING MUNICIPALITIES, AND THE CONTRIBUTER THEREFORE YOU THE TAXPAYER. EITHER YOUR COUNTY/TOWN/VILLAGE HAS CUT SERVICES OR RAISED TAXES, OR A COMBINATION OF BOTH IN ORDER TO SUBMIT THESE HIGHER PENSION PAYMENTS TO ALBANY, AND THERE’S NO END IN SIGHT. WE NEED SIGNIFICANT PENSION REFORMS, AND THE TIER6 WHICH FOR A CHANGE STARTED OUT AS A MEASURE THAT REALLY COULD HAVE BEEN EFFECTIVE, ENDED UP PASSED AS A WATERED DOWN VERSION OF IT’S FORMER SELF, AND IN NO WAY GOES FAR ENOUGH!)

From more bad rankings for NY State, to more National nightmares on economic policy, taxes, jobs, energy, healthcare, waste, GSA scandal and more… Today’s notes:WRN: From more bad rankings for NY State, to more National nightmares on economic policy, taxes, jobs, energy, healthcare, waste, GSA scandal and more… Today’s notes:

The Six States Where Taxes Are Soaring 247wallst.com Posted: March 19, 2012 at 6:37 pm 4. New York > Increase in personal income  tax: more than 5% > Expenditure per capita  (2008): $5,353 (12th highest) > 2009 budget  shortfall: 13.2% (16th highest) > Home price decline from  peak: 8.3% (16th smallest) According to the Tax … Continue reading »