January 6, 2013
President Obama’s claim that the cliff deal reduced the deficit by $737 billion earned only one Pinocchio from the Washington Post’s Glenn Kessler. The fact is that the deal cost $3.8 billion in lost revenue over ten years, and middle class families––who supposedly didn’t have their taxes raised––are losing the payroll tax break which the President claimed as part of his tax cut during the campaign.
But Obama deserves at least one more Pinocchio for pretending the tax rate hike truly impacts the wealthiest 2 percent of Americans. In fact, it only impacts to any meaningful extent high salary wage earners (like pro athletes). As Rush Limbaugh and others have pointed out, the deal doesn’t impact Warren Buffet and the truly wealthy whose income is derived from capital gains or carried interest (which is income that is treated as a capital gain). Warren’s rate will only go from 15% to 20%––which is still less than his secretary will pay if she earns more than $36,250 (assuming she’s single or she and her husband earn more than $72,500.)
Here’s Kessler’s conclusion: “In effect, Obama is arguing that eliminating the tax cuts for the wealthy reduces the projected deficit, but keeping tax cuts for all other Americans…has no impact on the deficit.” Further, the end of the tax holiday is not a tax increase because it was deemed to be temporary. Got it?!
Why is any of this important? If we’re not used to Washington truthspeak by now, we haven’t been paying attention, right? The point is that Obama and the Democrats can’t and won’t stop with this victory. They will need more revenue in order to implement their agenda. Therefore, like the Communist Party of the Soviet Union, which claimed they had gotten rid of all the capitalists until they needed to impose some new harsh measure and therefore found some vestiges of capitalism that had escaped their prior house cleaning, the Democrats are suddenly going to discover that the wealthy still aren’t paying their fair share––only this time, they’re going to have to include more people in the “wealthy” category in order to meet their spending needs.
Limbaugh argues the Democrats can’t touch the truly wealthy because they are dependent on them for campaign contributions. So, look for wage earners in the $250,000 to $450,000 category to be the sacrificial lambs in the next Democratic Party tax deal. How many Pinocchios would you give them?
May 22, 2012
Will Andrew Cuomo follow the example of Barack Obama and try to use his administrative authority to implement something he can’t get passed the constitutional way?
Advocates of an increase in the state’s minimum wage law have suggested Cuomo do an end around on the State Senate which opposes the measure as threatening small business and jobs.
This observer feels it is unlikely that Cuomo will do so, however. He certainly might have tried something like that when he was younger, but he’s much too smart to jeopardize his own career by playing footloose and fancy-free with the state constitution.
The opening Dean Skelos has given the governor and the State Assembly looks like a more appealing alternative. Skelos has suggested the Senate might stomach the minimum raise hike if offset by targeted tax breaks. Of course that would mean Cuomo would have to find ways to reduce state spending. Such a compromise would likely help the Republican Party hold onto the Senate in November. As a result, the most likely outcome is that neither gets done in 2012.
January 7, 2012
Thank you to Russell Sykes for pointing out that Sheldon Silver, the majority leader of the NYS Assembly, made a meaningless promise to people living in povery on Wednesday during his remarks prior to Governor Cuomo’s state of the state.
Sykes wrote on behalf of the Empire Center for NYS Policy:
In addition to seeking a higher minimum wage, Speaker Sheldon Silver announced this week that the Assembly will seek to reduce state taxes on the working poor. Specifically, Silver said:
Under our plan, working families who earn less than $30,000 annually will see their income taxes cut. Working families who earn less that $25,000 will pay no taxes at all.
But this is a solution to a non-existent problem. The working families described by Silver already pay no income tax, thanks to New York’s exceptionally (and appropriately) generous Earned Income Tax Credit (EITC). As documented in a recent report by the Center on Budget and Policy Priorities, a family of three pays no income tax until its income exceeds $34,600, and a two-parent family of four pays none until income exceeds $40,300.
At a poverty level income of $17,374, a single parent of two children gets a refund of $1,917 due to the EITC. At a minimum wage annual income of $15,080, a two-parent family of four gets a refund of $2,109 – in effect raising its annual income to $17,189.
December 21, 2011
In an editorial today, the WSJ makes the same point I made a week ago. Under the title of “Ron Paul Nader?” they state that Paul “owes the GOP voters a straight answer on a third-party run.”
And, the Journal finally made the obvious point on the payroll tax imbroglio, that the problem largely derives from the lack of courage on the part of the GOP members of Congress. Instead of being trapped by President Obama into opposing a “tax cut,” the GOP has been afraid to remind the American public that the 2 percent reduction in their payroll taxes was passed as a temporary one-year measure and that the country has to borrow money from the Chinese and others to pay for it.
The question they should be putting to the public is do you want the temporary cut continued if it means your grandchildren will have to pay for it plus interest down the road?
December 7, 2011
Governor Cuomo and the leaders of the NYS Assembly and NYS Senate announced a tax and spend deal yesterday which cuts taxes for “moderate” income New Yorkers while raising the rate for high income earners. They also agreed to spend $1 billion on public works projects and move towards a constitutional amendment to allow casinos on non-Indian lands.
Read the details on the Empire Page, then vote on our poll question of the week.
December 5, 2011
Read NYS Gov. Andrew Cuomo’s op ed on tax reform in the guest editorial section of the Empire Page.
August 17, 2011
We published today comments by a number of friends and colleagues of the Empire Page on the question of what next for NYS. Based on the premise that Andrew Cuomo’s first legislative session was more positive than negative, we wondered what can be done to continue to bring fiscal, economic and social health to NYS in light of a national — if not world– economy that is barely moving forward.
Anyone interested in NYS’ future will gain insights and ideas from reading our experts’ comments. Feel free to use the comment form at the bottom of the page. (Comments will be moderated.) And if you feel you have a unique viewpoint on the problems and can present your ideas coherently, send them to firstname.lastname@example.org. If they pass muster, we’ll add them to the page.