JANUARY 1999Faso proposes 'indexing' taxes and other reductions
Assembly Republicans proposed tax reductions that would include expanding the Earned Income Tax Credit and adjusting state taxes every year to eliminate inflation-driven increases in income taxes.
The plan announced by Republican Leader John J. Faso, which would return $1.5 billion to taxpayers, also matches Governor Pataki's budget proposals to reduce personal taxes on middle-income families, individuals and small-business owners.
The Families First 2000 tax plan would adjust state tax brackets annually to reflect the inflation rate. Otherwise, Faso said, New Yorkers will continue to suffer "bracket creep" - in which cost-of-living increases in salaries and wages drive more taxable income into higher tax brackets.
The Assembly Republican tax plan also includes:
- A statutory limit on school taxes of the inflation rate or 5 percent, whichever is less. Without such a cap, the plan says, "STAR exemptions could serve as cover for larger-than-usual tax increases or for a tax shift to business property owners."
- A $150 per child tax credit for low- and middle-income parents, to offset school expenses such as tutoring, academic summer camps, and private-school tuition.
- Raising the EITC from the current 20 percent to 25 percent of a taxpayer's federal credit. The Business Council supports expanding the EITC to provide an incentive for low-income workers to stay off the welfare rolls.
- Expanding the STAR property-tax reduction plan for homeowners to cover part of county taxes.
January 27, 1999