The following letter from Business Council President Daniel B. Walsh was delivered to Governor Pataki Wednesday, April 15.Staff Contact:
Honorable George E. Pataki
Albany, New York 12224
Dear Governor Pataki:
RE: Your support for the proposed tax cuts
The new tax reductions approved by the Legislature represent the next giant step forward in the drive to make New York State more competitive for businesses and jobs. We strongly support the proposed tax package, and respectfully urge you to sign it into law.
The centerpiece of the new tax cuts is the proposed reduction in our broad-based corporate and Subchapter S tax rates from 9.0 to 7.5 percent. This alone is a once-in-a-generation improvement in our competitive standing on business taxes. At 7.5 percent, our corporate tax rate would reach its lowest level since 1970. Such a change would not only leave New York businesses more dollars to invest in growth and new jobs, but would draw attention from business owners and managers around the entire nation.
You and I have discussed the importance of including the banking and insurance industries in the broad-based rate reduction. We are anxious to work with you as soon as possible to build on this legislation and bring those key industries down to the 7.5 percent level along with other businesses.
As you know, other elements of the tax package are also critically important. Your own support for reduction of the alternative minimum tax, during our recent Small Business Day event, was widely noted and appreciated by manufacturers and other employers. Extending the investment tax credit to the securities industry will make New York much more competitive for the new jobs in that increasingly vital sector.
The proposed reduction in the truck mileage tax will strengthen our trucking industry, while reducing shipping costs for manufacturers, retailers and other businesses. Small businesses will benefit from reduction of the fixed-dollar minimum tax, new high-tech tax credits for emerging companies, conformity with the federal estate tax law and other reforms.
The proposed tax-reduction legislation represents the type of fundamental improvement as opposed to marginal change that New York must continue to make if we are to beat our competitors in the battle for new jobs. The personal income tax cuts you achieved in 1995 were that type of fundamental reform. As you have said often, we need to go further in cutting the taxes that still diminish our prospects for new growth and opportunity. This legislation does so.
And the Legislature's tax proposals are affordable especially given that the ultimate $743 million "cost" does not occur until the year 2002-2003. That allows fully four fiscal years in which the foregone revenues can be absorbed into the financial plan. Some critics said the Pataki personal income tax cuts at more than five times the value of this package were unaffordable. You proved them wrong. We're confident the same critics will be wrong once again.
We share your belief that any budget must be good not just for a single year, but for the long-term good of the state, as well. We also agree strongly with your conviction that what New Yorkers need most is a strong economy, to provide the jobs and wealth that pay for meeting so many other needs. The tax-reduction legislation approved by the Legislature will build on the tax cuts you have already signed into law to bring significant new economic growth including, we believe, thousands of new jobs to the Empire State.