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Wealthy New Yorkers could pay higher taxes if Gov. Cuomo changes tax code

Talks are taking place behind the scenes on changes to New York’s tax code that could result in the wealthy paying higher taxes.  Governor Cuomo, who is asking for the changes, is also proposing a gambling expansion and  other initiatives which he is asking the state legislature to consider later this week.

Governor Cuomo outlined his agenda for a possible special session in what he called an Op-Ed column to newspapers. In it, he says he’s seeking more gambling casinos in New York, and an infrastructure repair fund that will fix dilapidated roads and bridges and create numerous construction jobs.  He also wants a job training program for inner city youth, and more money for regional economic development.

At the end of his essay, Cuomo mentions the topic that’s brought the most controversy and discussion, a revamping of the state’s tax codes, which could result in wealthier New Yorkers paying more in taxes.

EJ McMahon, with the conservative leaning think tank The Empire Center, likened the first items to a big box  delivered from Federal Express or UPS.

“And you’re kind of excited, only to open it, and find that  it’s a smaller box surrounded by Styrofoam peanuts,” McMahon said. “The governor’s so called jobs program is basically Styrofoam peanuts.”

McMahon says it’s the tax proposal that is key.

“The tax increase is about either extending or permanently establishing a higher rate than now is in current law,” said McMahon. “Which of course reverses his position on taxes, until very recently.”

The governor has said repeatedly during his first year in office that he does not sanction higher taxes, and has remained steadfastly opposed to the extension of a temporary income tax surcharge on millionaires, which expires at the end of this month.  

Elizabeth Lynam, with the budget watchdog group Citizens Budget Commission, says reducing inequities in the current tax code and reexamining all the tax brackets is a much better plan, not just “plunking in” one bracket or simply extending extra taxes on the richest New Yorkers.

The State Assembly is due back at the Capitol Tuesday afternoon, with the Senate expected on Wednesday. If the legislature were to agree to Cuomo’s proposed changes,  they would be clearing up some major budget hurdles months before the start of the new fiscal year, in April. McMahon, with the Empire Center, says there’s a good reason for the governor to desire action in December, and it doesn’t have to do with the budget.

In February, Cuomo will need to decide whether or not to reject the legislature’s plan to draw new districts for its members. McMahon says lawmakers may think that if  they agree with some of the governor’s agenda now, Cuomo may allow them more leeway to draw district lines to suit their political interests.  After the February deadline for redistricting passes, the governor’s leverage significantly decreases, he says.

“I am not suggesting a spoke quid pro quo here,” McMahon said. “This doesn’t need to be mentioned. Everyone is aware of it.”

Late in the day, Cuomo released a second statement that he also called an “Op Ed”.  In it, he says the current tax system is “unfair”, and proposes adding “multiple “ income brackets,  including more “high end brackets”, another way of saying, he wants the wealthy to pay more taxes.  

The governor is already getting some pushback. The chair of the state’s Conservative Party, Mike Long, says in a letter to Senate Republicans that “New York has a spending problem” that won’t be resolved by increasing taxes.

And the leader of the state’s largest business lobby, Heather Briccetti of the Business Council, says “an improved business climate, not new taxes”, should be the top priority. 

Karen DeWitt is Capitol Bureau Chief for New York State Public Radio, a network of 10 public radio stations in New York State. She has covered state government and politics for the network since 1990.