A TAX PLAN THAT WILL BOOST NEW YORK
Text of a letter sent to New York State's Congressional Delegation from Daniel B. Walsh dated March 5, 2003
March 5, 2003
United States Senate
Washington, DC 20510
Dear Senator Schumer:
RE: A tax plan that will boost New York
Congress has the opportunity to enact legislation that will drive billions of dollars to New York State, provide a major boost to one of our most important industries, and create new jobs for both highly educated and lower-skilled workers in the state. I refer, of course, to President Bush's tax and economic growth plan.
The President's tax cuts would do so much good for our state, I truly don't understand how New Yorkers could do anything but warmly embrace the plan.
The proposal drawing the most attention would exempt dividend income from personal income tax. Such an exemption would boost stock prices significantly in the long run - indeed, many observers credited the President's proposal with doing so in the first days after it became known. It would also increase the amount of wealth that investors across America and around the world send to Wall Street.
Even after recent market declines, the securities industry employs some 180,000 New Yorkers. Because of the enormous wealth the industry brings into New York, it generates hundreds of thousands of spin-off jobs - ranging from other high-paid jobs in business services, to lower-paid positions that are often a godsend for lower-skilled working men and women.
I know you are aware that a healthy and growing securities industry is enormously important to the budgets of both New York City and New York State. By strengthening this vital industry, the President's plan will generate billions of dollars in new state and city tax revenue - dollars that can go to our schools, to health care, and to avert the pressure for new tax increases. When Wall Street was booming in the late 1990s, times were good for New York. When the securities industry is down, as it has been more recently, communities all across the state feel the pain.
President Bush's proposal to speed up implementation of the federal tax cuts enacted in 2001 would also be disproportionately beneficial to New York. Critics say those tax cuts primarily help "the rich." If true, that's good news for New York: As far as the federal tax code is concerned, we are "the rich." Average incomes are higher here than in most other states (which also happens to be why our Medicaid reimbursement rate, to mention a related issue, is among the lowest of any state's). Reducing federal tax rates, as President Kennedy said 40 years ago, will help boost the American economy - and, I would add, especially that of New York State.
But the President's plan is, of course, not only for those who are well-off. His proposals to reduce the marriage penalty and increase the child credit more quickly will return substantial sums to thousands of working families in our state, this year. Small businesses would benefit from the increase in expensing limits, stimulating additional investment which in turn will lead to still more job growth.
Perhaps the most obvious reason to support the President's plan: In sending taxpayer dollars to Washington, and receiving federal spending in return, New York is a perennial loser. As Senator Moynihan said in his final report on the federal budget and the states in 2000: "The transfer of wealth keeps working against us."
Our Public Policy Institute has just calculated New York's imbalance of payments with Washington for fiscal 2001. The loss to New York taxpayers that year: $39.6 billion. Here's a chance to cut our losses, by cutting our taxes.
For all the above reasons, President Bush's plan is good for New York State. I urge you to support its early passage.
(Signed) Daniel B. Walsh