Governor Andrew Cuomo has made it clear that he cares more about political expediency than bare necessity. So what are we to make of his plan to give banks and corporations as much as $400 million in tax cuts?
A committee of experts ordered by the governor to review the state's tax code and make recommendations issued a report this fall [PDF] that stated "New York's taxes are too high and its tax code too complex."
In addition to pointing out a need for a sales tax reorganization and funding low and middle income tax relief, the report states that the "corporate franchise tax structure is badly outdated, unduly complex and vulnerable to aggressive tax avoidance techniques."
New York continues to tax banks and other financial corporations under different articles of the Tax Law, based on "transitional provisions" that have preserved the tax status of these corporations as of the time the GLBA became law.
The current system violates the basic tax policy principles of fairness and efficiency, increases compliance and administration costs and results in a volatile revenue base.
More than 20 percent of corporate taxes are collected through the audit process, a telling statistic supporting the need for reform.
The committee's revenue neutral recommendations include consolidating bank and corporate taxes, and repealing certain business tax incentives.
Carol Kellermann, a spokeswoman from the Citizens Budget Commission, another nonpartisan budget watchdog group, said that she couldn't comment specifically on the cuts or the governor's proposal, and that the CBC would release their position on Cuomo's proposal later this week.
"In general, consolidating [taxes] is a good thing," Kellermann said. "But if you look at the report, I don't think they recommended any cuts that weren't revenue neutral."