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February 26, 2014
Photo via NY1
Gov. Cuomo today announced yet another enormous state tax subsidy for the entertainment industry — this time for Disney and Netflix to produce a live-action Internet TV series based on Marvel Comics superheroes in New York City.
The incentive will come out of New York’s $420 million-a-year Film and TV Production Credit program, which reimburses up to 30 percent of production costs in New York. It’s a sweet deal, as explained in an unpublished research study prepared for the governor’s Tax Reform and Fairness Commission last fall:
… Based on IRS industry-specific data, a 30 percent credit would equal about 55 percent of taxable income of a typical film production firm. In 2008 (the latest year for which detailed data are available), the credits received by 31 film production industry taxpayers exceeded the combined tax liability of the entire industry — all 1,600+ firms — in nine of the ten previous years. Because the credit exceeds tax liability many times over and is refundable, in effect it is a program of cash payments by the state to credit recipients. [emphasis added]
February 19, 2014
Anyone with a “permanent place of abode” in New York is required by law to pay income taxes to the state — and to New York City, as well, if the “abode” is there. But if you’re an out-of-state resident who sets up and maintains a rent-free home for your parents in New York, does that make you a New York resident, too?
The state Tax Tribunal said “yes” — and ordered John Gaied, the owner of a Staten Island auto repair shop, to pay $253,062 in back taxes for a three-year period in which Gaied said his home was actually in New Jersey.
Yesterday, however, the Court of Appeals unanimously overturned that decision.
January 7, 2014
In his fourth annual State of the State message tomorrow, Governor Andrew Cuomo will (naturally) seek to highlight the most positive aspects of New York’s economic performance under his leadership. As the Governor put it during a press conference yesterday previewing his tax agenda:
[W]e’ve added 380,000 private sector jobs since 2010. New York is number two in jobs created since the recession … We have more jobs today than at any time in history of the state of New York. Unemployment in every region is down from where we started three years ago, so all the arrows are pointed in the right direction.”
All of these statements are accurate — as far as they go. However, on closer examination, the employment numbers for New York paint a more mixed picture. Based on the latest available data from the state Department of Labor and the U.S. Bureau of Labor Statistics (BLS):
- New York State has grown more slowly than the national average since Governor Cuomo took office, largely as a result of a modest slowdown in job growth relative to the U.S. average during the past 18 months.
- There continues to be a pronounced regional variation in economic performance. Thanks to strong growth downstate, especially in New York City, New York State ranks 21st out of 50 states in its rate of private job creation since November 2010. But if the 50 counties of upstate New York were a separate state, they would rank dead last during the same period.
December 17, 2013
A bill implementing a larger New York City income tax hike than the one proposed by Mayor-elect Bill de Blasio has been introduced in the Legislature by state Sen. Adriano Espaillat, a Democrat representing upper Manhattan and the Bronx.
De Blasio campaigned on a promise to boost the rate on taxable incomes of $500,000 or more by 0.55 percentage points, from the current 3.86 percent to 4.41 percent.
December 10, 2013
The Pataki-McCall tax commission report unveiled on Long Island today is a decidedly mixed bag. The commission’s recommended business and estate tax changes would represent solid steps to make New York more economically competitive. However, those changes are coupled with “property tax relief” proposals that would offer virtually no economic bang for the buck.
November 27, 2013
Over the past few days, Governor Cuomo has made it clearer than ever that his “tax cut” focus next year will be on something that can be more accurately described as a tax shift: the creation of a new property tax “circuit breaker” credit that homeowners could claim on their state income taxes. The credit would rebate a portion of local property taxes, to the extent that they exceed some set percentage of each homeowner’s income. (For an example, see this Assembly bill.)
Cuomo also made it clear that he doesn’t want to touch the state’s largest revenue source–the personal income tax, or PIT– because, he said on the Capitol Pressroom radio show, “we just did the PIT last year … in the budget.” In fact, what Cuomo and the Legislature “just did” with the income tax in the 2013-14 state budget was to temporarily extend, for three more years, a 29 percent tax hike on individuals earning more than $1 million and couples earning more than $2 million, which was previously due to expire at the end of 2014.
November 14, 2013
The report of Governor Cuomo’s Tax Reform and Fairness Commission is a useful, well researched collection of interesting and provocative ideas — some much better than others. Not a bad place to start a further exchange of ideas leading to a fruitful debate on the topic, assuming such a thing is possible in Albany. (One can always dream.)
For example, the report is very good on the subject of how to “modernize” (i.e., broaden) the sales tax base. But takes a wrong turn in recommending what ought to be done with the money raised by these changes.
October 16, 2013
Mayoral candidate Bill de Blasio’s “big, bold” proposal to hike the marginal income tax rate in New York City has smoked out Governor Andrew Cuomo’s now-you-see-it, now-you-don’t supply side.
From today’s Daily News:
Cuomo, during a meeting with the Daily News Editorial Board, said he is looking to cut taxes next year — not raise them — arguing it’s important that the “arrow is pointed down.”
April 24, 2013
New York’s rate of growth in withholding tax receipts during the final quarter of 2012 was among the lowest for any state with an income tax, according to the latest quarterly State Revenue Report from the Rockefeller Institute of Government. ***See Update at bottom of post.***
Withholding taxes are driven mainly by changes in employment and wages and thus serve as an indicator of economic growth. The Rockefeller Institute’s report says New York’s withholding receipts grew by 3.3 percent in the fourth quarter of 2013. That was less than half the national average of 7.8 percent, and also below the five-state Mid-Atlantic regional average of 4 percent. Only six of the 41 states with income taxes had lower withholding growth during the same period. (According to the same Rockefeller Institute report, New York’s employment growth in 2012 was also below average.)
One important caveat: on a year-over-year basis, New York’s personal income tax receipts in 2012 were reduced in part due to the Dec. 31, 2011, sunset of a portion of the “millionaires tax” that applied to incomes as low as $200,000. The extended tax applies only to incomes above $1 million for individuals and $2 million for couples. ***See added note at bottom of post.***
April 16, 2013
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President Obama’s proposed cap on itemized federal income tax deductions for state and local taxes would cost New York residents $3.8 billion a year, according to a report released by Governor Cuomo’s office today. However, you’ll have to dig a little to find that number: Obama isn’t mentioned until page 11 of the 26-page document.
The opening section of the report (which is, by the way, useful and well-researched in most respects) focuses on how bad it would be for New Yorkers if the federal government were to completely eliminate the deduction for state and local taxes. However, no one in a position of authority in Washington is actually proposing such a thing. The much more more serious risk to New York is that the White House and Congress will agree to some form of limit on itemized deductions for high-income taxpayers, as Obama proposed in his budget last week (reviving a proposal he first trotted out three years ago).