Category: News and Opinion

Economically efficient taxation includes a low tax rate spread over a wide tax base. In New York State, on the other hand, politically efficient taxation includes high tax rates spread over a tax base narrowed by exemptions, privileges, deductions, and tolerated tax evasion. Preferential treatment, tax and otherwise, was clearly on the minds of New York State leaders at a more enlightened point in our state’s history. Consider Article 3, Section 17 of the New York State Constitution, which prohibits "granting to any person, association, firm or corporation an exemption of real or personal property." It also forbids "granting any person, association or individual any exclusive privilege, immunity, or franchise whatever." Then there is Article 16, Section 4 which states "there shall be no discrimination in the rates and method of taxation between such corporations and other corporations exercising substantially similar functions and engaged in substantially similar businesses within the state." But it doesn’t matter. Whenever the economy is good, more special tax deals are enacted as added revenues come in.  And whenever the economy is bad, rates are raised.  Sometimes they are rolled back, and sometimes not.

Economically efficient taxation includes a low tax rate spread over a wide tax base. In New York State, on the other hand, politically efficient taxation includes high tax rates spread over a tax base narrowed by exemptions, privileges, deductions, and tolerated tax evasion. Preferential treatment, tax and otherwise, was clearly on the minds of New York State leaders at a more enlightened point in our state’s history. Consider Article 3, Section 17 of the New York State Constitution, which prohibits "granting to any person, association, firm or corporation an exemption of real or personal property." It also forbids "granting any person, association or individual any exclusive privilege, immunity, or franchise whatever." Then there is Article 16, Section 4 which states "there shall be no discrimination in the rates and method of taxation between such corporations and other corporations exercising substantially similar functions and engaged in substantially similar businesses within the state." But it doesn’t matter. Whenever the economy is good, more special tax deals are enacted as added revenues come in.  And whenever the economy is bad, rates are raised.  Sometimes they are rolled back, and sometimes not.

Economically efficient taxation includes a low tax rate spread over a wide tax base. In New York State, on the other hand, politically efficient taxation includes high tax rates spread over a tax base narrowed by exemptions, privileges, deductions, and tolerated tax evasion. Preferential treatment, tax and otherwise, was clearly on the minds of New York State leaders at a more enlightened point in our state’s history. Consider Article 3, Section 17 of the New York State Constitution, which prohibits "granting to any person, association, firm or corporation an exemption of real or personal property." It also forbids "granting any person, association or individual any exclusive privilege, immunity, or franchise whatever." Then there is Article 16, Section 4 which states "there shall be no discrimination in the rates and method of taxation between such corporations and other corporations exercising substantially similar functions and engaged in substantially similar businesses within the state." But it doesn’t matter. Whenever the economy is good, more special tax deals are enacted as added revenues come in.  And whenever the economy is bad, rates are raised.  Sometimes they are rolled back, and sometimes not.

If you have been paying attention, you have read that I recommend changes to New York State’s Medicaid program to create incentives to reduce spending.  I propose similar changes in incentives to reduce spending in the state’s public schools outside New York City, partially balanced by increased spending in districts where spending is low, particularly New York City – but a smaller increase than proposed by the plaintiffs in the Campaign for Fiscal Equity case.   The tax surcharge-based disclosure of the cost of retiree health benefits, pensions, and debts I have suggested are intended to limit, in the long term, the hidden growth of employee compensation and the interest burden of excess debt.  One might conclude that my proposals would lead to lower taxes.  And in the long run, when state and local taxes are combined, that could be the case.  But not in the short run for state taxes alone.

If you have been paying attention, you have read that I recommend changes to New York State’s Medicaid program to create incentives to reduce spending.  I propose similar changes in incentives to reduce spending in the state’s public schools outside New York City, partially balanced by increased spending in districts where spending is low, particularly New York City – but a smaller increase than proposed by the plaintiffs in the Campaign for Fiscal Equity case.   The tax surcharge-based disclosure of the cost of retiree health benefits, pensions, and debts I have suggested are intended to limit, in the long term, the hidden growth of employee compensation and the interest burden of excess debt.  One might conclude that my proposals would lead to lower taxes.  And in the long run, when state and local taxes are combined, that could be the case.  But not in the short run for state taxes alone.

If you have been paying attention, you have read that I recommend changes to New York State’s Medicaid program to create incentives to reduce spending.  I propose similar changes in incentives to reduce spending in the state’s public schools outside New York City, partially balanced by increased spending in districts where spending is low, particularly New York City – but a smaller increase than proposed by the plaintiffs in the Campaign for Fiscal Equity case.   The tax surcharge-based disclosure of the cost of retiree health benefits, pensions, and debts I have suggested are intended to limit, in the long term, the hidden growth of employee compensation and the interest burden of excess debt.  One might conclude that my proposals would lead to lower taxes.  And in the long run, when state and local taxes are combined, that could be the case.  But not in the short run for state taxes alone.