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April 16, 2014


One more business climate ranking

E.J. McMahon

New York has earned a poor grade on yet another ranking of state tax climates — this one issued by the Small Business & Entrepreneurship (SBE) Council, a research and advocacy group based in Virginia.

SBE’s 2014 assessment of “best to worst tax climates” for states puts New York in 45th place, based on a state-by-state comparison of burdens imposed by 21 different taxes including income, capital gains, property, death, unemployment, and various consumption-based taxes, including state gas and diesel levies.

(more…)

Filed under: Economy, Taxes

April 15, 2014


Budget nudges up NY tax ranking, a little bit

E.J. McMahon

The Tax Foundation, which ranked New York dead last on its latest annual State Business Tax Climate Index, today issued a highly complimentary analysis of the corporate tax reduction and reforms enacted as part of 2014-15 New York State budget. However, while it called the corporate tax changes “impressive,” the Tax Foundation also made it clear that the state’s business tax climate still has plenty of room for improvement.

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Filed under: Budgets, Taxes

How competitive is NY? (cont’d…)

E.J. McMahon

New York State’s relative economic performance wasn’t so hot in the recent past — but its outlook for the future is worse, according to the just-released 7th Annual Rich States, Poor States report, an economic competitiveness index produced by the American Legislative Exchange Council (ALEC).

The report—co-authored by noted supply-side economist Arthur Laffer Stephen Moore and Jonathan Williams—ranks states in two ways.

(more…)

Filed under: Economy, Taxes, Uncategorized

April 14, 2014


For whom the income tax tolls

E.J. McMahon

By midnight on April 15, more than 8.5 million personal income tax returns for 2013 will have been filed with the New York State Department of Taxation and Finance. Roughly one-third of those filers will owe nothing, and big chunk of total PIT receipts will come from a tiny fraction of high-income taxpayers.

The highest-earning 1 percent of New York PIT payers are expected to have total tax liability of $16.2 billion, or 42.3 percent of total tax liability for 2013, according to estimates in the Economic and Revenue Outlook volume of the 2014-15 Executive Budget (see p. 175). The income of the top 1 percent begins at $838,572, the Division of the Budget (DOB) estimates.

Note: At least one commenter on this blog asked what share of income is earned by the top 1 percent.  Good question! Unfortunately, the budget does not contain that statistic for 2013. But other data consistently have indicated that the share of income reported by the top 1 percent is less than its share of New York state income tax liability. For example, a separate stable in the budget projects that, in 2014, filers with incomes above $1 million will pay 41.3 percent of the PIT while reporting 26.2 percent of adjusted gross income.

(more…)

Filed under: Taxes, Uncategorized

April 2, 2014


NY’s tax burden: still heaviest

E.J. McMahon

New York ranks number-one in the Tax Foundation’s latest annual ranking of combined state and local tax burdens, released this morning.

As of 2011, the combined per-capita tax burden on New Yorkers came to 12.6 percent of per-capita state income, the report said. The national average was 9.8 percent.

But wait: the newly enacted “Grand Slam” state budget includes real cuts in corporate and estate taxes, right?  What would our ranking look like if these cuts had been fully effective in 2011?

(more…)

Filed under: Taxes

February 26, 2014


Speaking of tax breaks for millionaires …

E.J. McMahon

Photo via NY1

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]

(more…)

Filed under: Taxes, Uncategorized

February 19, 2014


Court chalks up one for taxpayers

E.J. McMahon

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.

(more…)

January 7, 2014


The State of the State’s job growth numbers

E.J. McMahon

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.

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December 17, 2013


Upping the ante on de Blasio’s NYC tax hike?

E.J. McMahon

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.

(more…)

Filed under: Taxes, Uncategorized

December 10, 2013


First take on Pataki-McCall commission

E.J. McMahon

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.

(more…)

Filed under: Taxes, Uncategorized
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