E.J. McMahon, president of the Empire Center for Public Policy, presented testimony to the Joint Legislative Budget hearing on taxes today in which he pointed to the property tax cap as the best mechanism to help relieve New York’s highest-in-the-nation property tax burden.
“The property tax cap is clearly doing its job of holding down local tax levy increases, especially at the school district level,” McMahon said. “The best way to help all local property taxpayers, homeowners and businesses alike, is to permanently enact the property tax cap.”
His testimony noted that New York raised taxes and fees by more than $7 billion statewide in 2009 and 2010, and another $1.8 billion in taxes and fees were imposed downstate. Though some tax cuts, many temporary, have been enacted since 2011, McMahon said the effective income tax rate today is “well above the average level between 2002 and 2008.”
While Governor Cuomo has proposed a “circuit breaker” style credit, McMahon’s testimony outlined the proposed credit’s flaws, and concluded:
Both STAR and the proposed property tax credit are subsidies designed to treat a symptom rather than dealing with the underlying disease. You will be offering $1.7 billion in Band Aids on top of $3.1 billion worth of aspirin.
McMahon also recommended the Legislature consider:
expanding upon reforms to the state’s Estate Tax by eliminating the confiscatory “cliff;”
permanently enacting across-the-board temporary cuts to personal income taxes; and
adopting a schedule to phase out the temporary tax increase on the highest-income individuals and businesses.