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Striking a balance

Rochester Business Journal
December 20, 2013

Gov. Andrew Cuomo has vowed to put reducing New Yorkers' tax burden at the top of his 2014 agenda, and he will start the new year with a good deal of wind at his back due to a pair of reports from advisory groups he established this year.
In mid-November, the New York State Tax Reform and Fairness Commission delivered its findings-namely, that the state's taxes are too high, too complex and unfair. Then last week, the Tax Relief Commission sent its final report to the governor, with a $2 billion package of proposed tax reductions.
Both reports contain thoughtful analysis and a range of solid recommendations. And without doubt, the governor's greater focus on taxes is welcome. As the Tax Relief Commission noted, in 2010 New York's taxpayers "had the dubious honor of paying the highest actual tax bills in the United States."
Yet care must be taken to push for changes that will do the most good and achieve a balance of lower rates, less complexity and more fairness.
From this standpoint, Tax Relief Commission proposals such as corporate tax reform, estate tax reform and accelerated elimination of the 18-A surcharge on energy purchases are clear winners. Together, they would provide nearly $1 billion in relief in fiscal 2016-17.
By contrast, the advisory panel's recommendation for property tax relief-what might be called its signature proposal, also with a $1 billion impact-has serious drawbacks. It is complicated, temporary and not really a tax cut at all, since someone (other taxpayers) will have to pay for the promised rebates. A simpler step with more long-term upside would be to remove the conditional sunset provision from the 2 percent cap on local property tax levies.
Then there's the matter of what's missing from the commission's report: any reduction in New York's personal income tax rate, which at the top end is 8.82 percent. The report says only that the panel wants the top rate reset to 6.85 percent in 2018, as scheduled.

Mr. Cuomo warmly welcomed the reports from the two commissions but has not said which proposals he will present to lawmakers. Let's hope that when he outlines his plans in the upcoming State of the State address, he will aim for the right mix of rate relief, simplicity and fairness.

12/20/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email

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