Andrew Cuomo is now touting his new "Tax Free New York" plan. The idea is to turn areas surrounding New York State Universities and community colleges into "tax free communities." There would be no sales, property, business, or corporate taxes in these areas for 10 years. There would be no personal income tax for 5 years, and after that personal income tax only on income over $200,000. On the web site, several CEO plutocrats enthusiastically promote the plan.
Jamie Dimon, CEO, JPMorganHome Depot co-founder Kenneth Langone had this to say:
Tax-Free NY is the type of visionary thinking we need from our leaders. Upstate New York has great strengths – like universities and entrepreneurs – that we need to continue to support. This is a creative way to do that, and to position Upstate for jobs and growth in new and promising industries.
I've said it repeatedly: States need to begin helping businesses by lifting the tax burden and also creating an environment in which employees want to raise their families. Governor Cuomo has answered that call with his Tax Free Communities initiativeBut who is he talking about when he says the "Tax Free New York" plan would create an environment where employees want to raise their families? Is he talking about people and families that directly and indirectly benefit from public investment in health care, infrastructure, education, and a safety net? Or is he talking about the few and the elite families who have always resented having to help pay for these programs? After all, they use private schools, private jets, private health care, live in gated communities.
The whole plan is based on the 30 year old false premise tax cuts alone represent the path to economic growth. There is little to no emphasis on the shared economic benefits of investments in health care, infrastructure, education, unemployment benefits, and a strong safety net. That's a debate we need to desperately change!
If tax reductions alone generated economic prosperity, we'd have a booming economy. Why has the U6 unemployment rate risen from 7.1% in January 2000 to a high of 17.1% in October 2009 down to 13.8% today? If tax cuts alone created prosperity, why has income inequality returned to 1920's levels?
But back to the plan. Richard Kirsch from the Roosevelt Institute has written an article illustrating why Gov. Cuomo's "Tax Free New York" plan would come at a high cost. He had this to say about it:
But Governor Cuomo has this totally backwards. Universities are business innovators because of the creative people who work there. Eliminating taxes around a community college or university does not make the people who teach and do research more creative or innovative. Businesses don’t start in university communities because of low taxes. Businesses are started in university communities because of the quality of the researchers and intellectual richness of the faculty. Attracting and supporting them takes money – from taxes!In other words, it takes a lot more than workable taxes for a business to thrive in the state? Don't they need a health, educated workforce? Don't they need customers who have money to buy their product or service?
Thoughts? Agree with the plan? Disagree? I think it is more of the same - the notion that tax reductions alone solve our problems rather than making desperate needed public investments in health care, job training, education, the environment, and the safety net. And that's a debate we need to change and how to do that is another diary!