Work from E.J. McMahon

Exploring NY’s top-heavy PIT base (2018 update) by E.J. McMahon |  | Reports

Nearly two-thirds of New York State’s tax receipts are now generated by the personal income tax, or PIT. As a result, the state is very heavily reliant on highest-earning 1 percent of New York taxpayers—whose effective income tax rates have increased sharply under the new federal tax law capping state and local tax (SALT) deductions. [Read_more]

Cuomo’s dug New York into a giant tax trap by E.J. McMahon |  | New York Post

Cuomo has further boosted the state’s already heavy reliance on taxes paid by income millionaires. This has made Albany’s revenue base more fragile and volatile — a problem aggravated by the new federal cap on state and local tax deductions, which effectively raises total tax rates for New York’s highest earners. [Read_more]

Looking ahead to next year’s Tax Day by E.J. McMahon |  | NY Torch

The interactive map on this page depicts how the federal Tax Cuts and Jobs Act (TCJA) will affect New Yorkers in two different adjusted gross income (AGI) ranges: $75,000 to $100,000, and $100,000 to $200,000. [Read_more]

NY’s unsavory new budget by E.J. McMahon |  | NY Torch

Last week's New York state budget approval process was even more rushed, secretive, confused and sloppy than usual—stretching through Good Friday and the first night of Passover into the predawn hours of Saturday, March 31—all in the name of meeting an ultimately inconsequential April 1 "deadline" for the start of the new fiscal year. [Read_more]

Still more capital pork in budget by E.J. McMahon |  | NY Torch

New York's Legislature and Governor Andrew Cuomo are shoveling yet another $475 million into the biggest, murkiest, pork-barrel slush fund Albany (and perhaps any state capital) has ever seen. [Read_more]

Schumer taps his own state by E.J. McMahon |  | NY Torch

Led by New York's Charles Schumer, U.S. Senate Democrats just unveiled a "Jobs and Infrastructure Plan" that would be financed disproportionately by Empire State taxpayers.

To cover the 10-year, $1 trillion price-tag of their package, Senate Democrats would reverse several provisions of the newly enacted federal tax changes—including reductions in the top income tax rate and in the Alternative Minimum Tax (AMT). [Read_more]

The shape of watered-down SALT by E.J. McMahon |  | NY Torch

The Cuomo administration has released a few more details of its plan to propose an optional payroll tax for New York employers as a way to preserve some of the state and local tax (SALT) deductions capped under the federal Tax Cuts and Jobs Act. [Read_more]

Gov. Cuomo’s selective fight against the new federal tax law by E.J. McMahon |  | New York Daily News

Even before Donald Trump became President, congressional Republican tax reformers had been aiming to get rid of or at least tightly curtail the state and local tax deduction, known as SALT, that mainly benefits residents of New York and other high-tax blue states. [Read_more]

New York’s SALT Substitute by E.J. McMahon |  | City Journal

Gov. Andrew Cuomo began 2018 the way he ended 2017: demonizing Washington Republicans and fulminating against the newly enacted federal tax reform, especially its $10,000 cap on state and local tax (SALT) deductions. Two weeks after his State of the State message, Cuomo devoted a portion of his fiscal 2019 budget presentation to the same subject, pledging again to come up with a plan to restructure the code by shifting from an employee-paid to an employer-paid income-tax system. [Read_more]

Cuomo’s big stealth tax hike by E.J. McMahon |  | NY Torch

Governor Cuomo's budget proposal includes more than $1.5 billion in automatic income tax hikes, affecting many of the same people who have the most to lose from the new federal limits on state and local tax (SALT) deductions. [Read_more]

The loose ends in Cuomo’s budget by E.J. McMahon |  | NY Torch

For the time being, at least, Governor Cuomo's 2018-19 Executive Budget left a pile of loose ends in the state tax code.

With one notable exception, the initial version of the budget doesn't address any of the myriad corporate and personal income tax (PIT) conformance issues raised by passage of the new federal tax law. Instead, those issues are to be explored in a study released by the Department of Taxation and Finance, for consideration during the 30-day amendment period. [Read_more]

The Senate GOP’s mixed bag on taxes by E.J. McMahon |  | NY Torch

State Senate Republicans today issued a "Blueprint for a Stronger New York" that combines a few solid big-picture tax reduction priorities with more of the wasteful "tax relief" gimmickry that's become a standard feature of the Senate GOP tax policy agenda in recent years. [Read_more]

Cuomo’s magical tax thinking by E.J. McMahon |  | New York Post

The governor said he’d explore the feasiblity of “a major shift” of New York’s state tax burden from individuals (who will be losing federal deductions) to businesses (which will be keeping them), via a new statewide payroll tax on employers.

The idea might sound plausible on the surface. But on closer inspection, replacing even part of New York’s personal income tax (PIT) with a payroll tax would be fraught with mind-bending complications — and not very feasible at all. [Read_more]

Hunting for a new SALT shaker by E.J. McMahon |  | NY Torch

Now that the feds have limited the state and local tax (SALT) deduction for individuals, should New York's no-longer-fully-deductible personal income tax (PIT) be converted into an employer payroll tax? [Read_more]

The double-edged sword of prepayment by E.J. McMahon |  | NY Torch

New York homeowners lining up to prepay property taxes in order to reduce their federal income taxes will also be in line for a temporary added cut in their 2017 state personal income tax. As a result, however, the prepayment phenomenon will also at least slightly erode the state government's already sagging income tax receipts in the current fiscal year—while making many of the same homeowners liable for at least a small tax hike in 2018.The rush to prepay local property taxes before the end of 2017, encouraged by Governor Cuomo in reaction to federal reform, will have some unintended consequences. [Read_more]

Cuomo’s Yuletide veto gifts by E.J. McMahon |  | NY Torch

Governor Andrew Cuomo is ending the year on a strong pro-taxpayer note, vetoing union-backed legislation that would have blocked the Nassau County Interim Finance Authority from imposing pay freezes to balance the county budget. [Read_more]

NY out-migration tops 1 million by E.J. McMahon |  | Reports

New York lost another 190,508 residents to other states, bringing the state's total domestic migration change since 2010 to a net loss of more than 1 million people. [Read_more]

What the tax bill really means for New York by E.J. McMahon |  | New York Post

You don’t have to be a fan of the federal tax deal to realize its impact on states like New York has been misrepresented by most of its leading political critics. [Read_more]

Little for NY in latest fed tax twist by E.J. McMahon |  | NY Torch

For the millionaire earners who generate an outsized share of New York State's income tax receipts, a possible congressional deal to trim the top tax rate in the final federal tax reform bill would take some of the sting out of losing the state and local tax (SALT) deduction.
[Read_more]

NYS teacher pension costs to rise by E.J. McMahon |  | NY Torch

New York's second largest public pension fund continues to move—at a glacial pace—towards a more reasonable and prudent assumption of its future investment earnings. [Read_more]

Deadline? What deadline? by E.J. McMahon |  | NY Torch

For the eighth consecutive year, New York's governor and Legislature have failed to comply with a decade-old law designed to foster a "quick start" of the state budget process for the next fiscal year. [Read_more]

Private job gains weak in NY by E.J. McMahon |  | NY Torch

The largest upstate New York metro areas had weak or declining private job numbers in October, and the state as a whole trailed the national employment trend, according to the latest year-over-year data from the state Labor Department. [Read_more]

Right point, wrong data by E.J. McMahon |  | NY Torch

The lead editorial in today’s Wall Street Journal highlights the role that high taxes have played in driving migration trends out of New York and other high-tax states.

Marginal tax rates matter, as the Journal very correctly points out. Unfortunately, in making this important point, the editorial relies a bit too much on a misinterpretation of migration data produced by the Internal Revenue Service (IRS), which tracks the movement of taxpayers among the 50 states. [Read_more]

New York’s budgetary “boo!” by E.J. McMahon |  | NY Torch

Ten days after the report's Halloween due date, Governor Cuomo's Division of the Budget (DOB) has just issued a mid-year Financial Plan update that might as well be wearing a fright mask.

The update reduces revenue projections by $850 million this year, and by another $850 in each of the next two years, mostly as a result of an estimated $750 million drop in annual personal income tax reductions. [Read_more]

State revenues sinking deeper? by E.J. McMahon |  | NY Torch

New York State's budget gap through fiscal 2018-19 could be a whopping $4.6 billion worse than indicated by Governor Cuomo's latest Division of the Budget (DOB) projections, according to new estimates from state Comptroller Thomas DiNapoli. [Read_more]

The NY tax hike in Trump’s tax cut by E.J. McMahon |  | New York Post

Plenty of unintended consequences, positive and negative, will be lurking in the fine print of the tax-reform bill unveiled Thursday by House Republicans.

But it’s already clear the plan would clobber Albany’s favorite cash cow: the seven-figure earners who generate more than 40 percent of the state income tax. [Read_more]

Cuomo’s mid-year tardiness continues by E.J. McMahon |  | NY Torch

Until a few months ago, Governor Cuomo could boast of producing an "on-time budget" in each of his first six years in office. But he also continues to steadily build on another kind of record: for a seventh consecutive year, he has now missed the statutory deadline for issuing the state's Mid-Year Financial Plan Update. [Read_more]

California Dreamin’ on SALT by E.J. McMahon |  | NY Torch

Governor Andrew Cuomo today staged a public joint conference-call with California Governor Jerry Brown to discuss the impact on their respective states of a proposal to eliminate the state and local tax deduction (SALT on federal income taxes. [Read_more]
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