For Release — Wednesday, February 24, 1999
BUSINESS COUNCIL URGES
LAWMAKERS TO ENACT MORE TAX CUTS TO BOOST THE ECONOMY EVEN MORE
ALBANY— New York State's tax code should be fundamentally restructured to turn a competitive disadvantage into "an advantage in the competition for jobs," Business Council President Daniel B. Walsh told key lawmakers today.
Testifying before the Senate Finance and Assembly Ways and Means Committees, Walsh asked the Legislature to enact major new business tax cuts this year, and to go further in coming years.
"Ours is an ambitious agenda," Walsh told lawmakers. "We believe the next few years should bring a tax-cutting program every bit as ambitious and successful as the one you have enacted in the past five years."
The Business Council has already asked Governor Pataki and the Legislature to act on several priority tax cuts this year. Those include:
- Reducing bank and insurance tax rates to match last year's cut in corporate rates.
- Eliminating unlegislated tax increases on electric utilities.
- Cutting further the gross receipts and ton-mileage taxes.
- Eliminating the petroleum business tax.
- Accelerating the tax cuts enacted last year.
Walsh praised Governor Pataki and the Legislature for the "dramatic" tax cuts of the past five years. Those have helped create 300,000 jobs that New York would not have today, if it had continued its record of the early 1990s, he noted. The state's 1998 rate of growth, 2.1 percent, was the best in more than a decade, and placed New York 23rd among the states, also New York's best showing in years.
"The 300,000 New Yorkers who hold those jobs today are among the best evidence that tax cuts work," he said.
Further evidence of tax cuts' economic benefit lies in the growth of capital investment after the alternative minimum tax (AMT) was reduced in 1995, Walsh said.
Still, "the progress we've made is not enough. We need to make New York an even more attractive place for companies to invest and create jobs," Walsh said. "Our taxes were so far out of line with other states, for so many years, that we have to go further if we are to be truly competitive."
Walsh said long-term tax reform should reflect these principles:
- Reward investment in New York. Walsh said that further
reductions in the AMT, use of a single-sales factor in apportionment
of corporate income, and ascribing receipts of securities firms to
the address of the customer would meet this goal.
- Eliminate double-taxation. Business expenses such
as commercial and industrial utility bills, investments in telecommunications
infrastructure and hazardous waste cleanups should be exempt from sales
tax, Walsh said.
- Make our economic "infrastructure" competitive. Further
reductions in the gross receipts tax on energy and telecommunications
utilities are needed, he said.
- Target local, as well as state, taxes. The Council supports mandate relief and other measures to ease the property-tax burden on business taxpayers.
"The motivation behind each element of our agenda is simple," Walsh said. "We seek to eliminate, wherever possible, limitations on the ability of New York State businesses to thrive, make a profit, and keep and create jobs for New Yorkers."
Walsh's testimony included a long list of tax increases enacted by New York from 1989-1993. He noted that most of those tax hikes have since been undone.
The Business Council is New York's largest broad-based business group, representing some 4,000 member companies large and small across the state. Based in Albany, it lobbies for a better business climate, and offers cost-cutting services to its members.