Assemblyman Fitzpatrick Votes No On Middle Class Tax Cut

On December 7^th the New York State Legislature voted on Governor Cuomo’s Middle Class Tax Cut.  The State Senate was unanimous in its support for the legislation that included tax cuts for most New Yorkers and eliminates the MTA tax for small businesses with payrolls between $10,000 and $1.25 million.  For businesses with higher payrolls there will be a reduction in the MTA tax.  In the Assembly, the legislation passed, but not unanimously.  There were six Republicans and two Democrats who voted Nay. Republican Michael Fitzpatrick was the only member of the Long Island delegation to vote nay.

The MTA tax enacted in 2009 has been a hot issue for Long Islanders who feel that they have been unreasonably burdened with this tax.  The NYS Republican Party on its website states, “Repealing the MTA payroll tax is essential for New York State to become more economically competitive, to help businesses expand and create new jobs.”  With bilateral support for the new tax brackets and abolition and reduction of the MTA tax, why would anyone vote against the legislation?

In a phone interview with Assemblyman Fitzpatrick, the Assemblyman explained his rationale for voting in opposition to the legislation.

“I am not convinced that this is good policy.  It seems they got the politics right, but the economics wrong.”  Assemblyman Fitzpatrick is steadfast in his position that raising taxes without cutting costs is unacceptable.  “ The bill had a lot of goodies to attract a lot of votes and the MTA tax cut was a big incentive for supporting the legislation.  The legislation was sold to people as providing the lowest tax rates in 58 years, but the reality is for the families who are at or earn the median income, the result is a $3 per week reduction in their taxes.  That is peanuts when you consider the burden you are putting on a small segment of taxpayers.”

“The problem I see is that NYS government is attempting to balance the State budget on the backs of a small number of people by raising their taxes.  The people who will be most impacted negatively are those with high risks in the market and are the most mobile.  They can move into a state with a lower tax burden.  This type of selective taxing does not work.  It hasn’t worked in states such as California, where it has been tried and it will not work here in New York.”

“The new legislation, despite its portrayal as a tax cut, is increasing the tax burden for a select group of people.  The tax surcharge (implemented after 9-11 by the Pataki administration) was set to expire on December 31, 2011.  The new legislation increases the tax bracket for those earning over two million dollars a year but it also raises their taxes at the same time you are reducing everyone else’s tax burden. 

Household Income	2011	2012	Difference
$40k-$150k	6.85%	6.45%	-0.4%
$150k-$300k	6.85%	6.65%	-0.2%
$300k-$500k	6.85+surtax=7.85%	6.85%	-1%
$500k-$2M	6.85+surtax=8.97%	6.85%	-2.12%
$2M+	6.85+surtax=8.97%	8.82%	-0.15%

(Chart – ProPublica Dec. 8)

Assemblyman Fitzpatrick emphasized the need for New York State to cut costs rather than raise taxes.  He focused on three specific areas where cost cutting is warranted.  The three areas are health care, defined benefit programs for public employees and the Triborough Amendment.  Part II Tomorrow