A broad community-labor coalition wants New York State to plug corporate tax loopholes – gaps in the tax code and in enforcement that cost more than $1 billion a year.
Recovering this revenue “will help New York to create jobs...and prevent more devastating budget cuts to services and our safety net,” said a statement from 99% New York, the coalition (including the PSC) backing the package of tax reforms.
Albany needs to “eliminate the absurd situation where bodegas and car repair shops are paying a higher rate than Goldman Sachs or Verizon,” said Michael Kink, executive director of Strong Economy for All.
“While our students are paying more, the highest earners in this state continue to get tax breaks,” said PSC President Barbara Bowen in Albany (see above). “Money is, in effect, going right from the pockets of our students who cannot afford lunch into the bank accounts of hedge-fund managers.”
“New York State’s corporate income taxes have become more and more like Swiss cheese as more and more tax breaks have been added,” said Frank Mauro, executive director of the Fiscal Policy Institute. “The result of these developments is that general business corporations have gone from carrying 9.6% of New York State’s tax load in the 1970s to 4.3% last year.”
DODGING THE BILL
Real estate partnerships are dodging State and local taxes by under-reporting and misreporting capital gains from real estate sales, costing New York State between $200 million and $700 million each year, warned 99% New York.
Another loophole targeted by the coalition is the current exemption for hedge fund profits under New York City’s Unincorporated Business Tax. And hedge fund managers who make their money in New York but live elsewhere don’t pay New York taxes, another kind of special treatment that the coalition aims to end.
Observers in the capital say these reforms have a shot at being passed, reflecting how Occupy Wall Street and related organizing have changed the political atmosphere. Occupy Albany’s Colin Donnaruma told the Times-Union that the tax changes would “generate much-needed revenue for the 99%.”