BALCONY Supports "Shared Sacrifice" to Continue New York State Higher Tax on the Wealthy

NEW YORK, NY (03/14/2011)(readMedia)-- The Business and Labor Coalition of New York, BALCONY, www.balconynewyork.com today (Monday March 14, 2011) called for an extension of the higher tax on New York's earners with taxable income over $200,000 as a means to help close the state's $5-9 billion budget deficit for 2011-2012. Keeping the tax on higher earners is part of the solution to help balance the state budget. This was the conclusion reached by BALCONY, a coalition of over one thousand businesses, labor unions, and advocacy groups, after its advisory board meeting in Albany in early February 2011. In 2009 BALCONY supported the tax on higher income New Yorkers.

"There must be "shared sacrifice" to help New York balance its budget. " stated Alan Lubin, BALCONY labor Co-Chairman , "BALCONY has long understood that raising new revenue would have to be part of the solution to our worsening economic situation, just as we recognize that prudent state spending is necessary. A New York State Progressive Income Tax increase that will raise approximately $5 billion is a step in the right direction. It is hoped that this action, economic recovery and growth needed to provide essential services will result in a brighter future for all New Yorkers."

Fiscal Policy Institute Chief Economist James Parrott in hisCan New York Depend on a "Millionaire's Tax" to Solve the Budget Crisis? stressed that while by itself the surcharge is not sufficient to close the state's budget gap - nevertheless its extension for 2012 and 2013 would add at least $5 billion in the state's fiscal year 2012-2013, this being an important counterweight to the additional cuts in essential services that would be necessary that year if the economic recovery does not accelerate and the states' revenue systems do not rebound.

"BALCONY has carefully considered suggestions from its diverse business and labor membership, as well as many citizens from New York State and leading economists to develop its position on solving our state's severe budget deficit. We believe that extending the taxes on our state's high-end income earners (which should not have a significant impact on their families) in conjunction with sensible cost cutting and improvements in efficiencies can solve our state's budget deficit, and keep New York healthy and competitive," asserted Bruce Ventimiglia, BALCONY's business Co-Chairman, and Chairman of Saratoga Capital Management.

According to a recent FPI report Grow Together or Pull Further Apart? Income Concentration in New York the top 1% in this country controls 24% of all the income. In New York City the top 1% controls the 45% of all income generated. In New York State as a whole the top 1% controls 35 % of all the income, while the bottom 80% of Americans are sharing 15% of the income in this country.

It is worth noting that in 1990, the top five percent of tax filers in New York State had 30.9 percent of all income; by 2007 the top five percent had just shy of half of all income in the state, 49.4 percent. At the same time, the income share of the bottom half went from 13.9 percent in 1990 to just 9.1 percent in 2007.

The Siena Research Institute poll released February 14, 2011 found voters overwhelmingly in favor of extending the Income Tax Surcharge on New Yorkers earning at least $200,000. By a nearly two-to-one margin – 65-33 percent –voters want the tax rate increase on those earning at least $200,000 a year continued, rather than see the surcharge expire at the end of this year as it is scheduled to do,. The Poll finds that most New Yorkers are in support of the "Millionaire's Tax bolster the arguments of many lawmakers – especially Assembly Democrats – who want to extend the tax to help close the state's $5-9 billion budget deficit.

Moreover, almost two-thirds of voters favor a surcharge on those making a million dollars or more, according to an exclusive NY1/Marist poll.

Parrot stressed that 'relying entirely or almost entirely on deep cuts to local assistance and state operations would do great damage to the state's economy in the short run but it would also hurt the state's long run economic competitiveness by the impact of such a strategy of the state's human capital and its physical infrastructure'. Notably, the least damaging strategy for balancing the state's budget this fiscal year, Parrott suggests, is an increase in taxes, that choice being simpler if the income tax surcharge that is scheduled to expire at the current calendar year remains in place.