ALBANY—Business is dismayed that lawmakers, wrangling over a surplus created by prosperity, are apparently talking little about tax reduction, the policy likeliest to expand our prosperity.
Governor Pataki and the Legislature have enacted major tax-reduction plans in each of the past five years' budgets. It's no surprise that New York's nascent recovery has coincided with those tax-cut initiatives.
Today New York is a lower-tax state--but not a low-tax state.
Thankfully, our legislative leaders recognized this earlier this year. Governor Pataki and every one of the legislative leaders proposed additional tax cuts to be included in this year's budget. The Business Council has urged that the next round of tax cuts include:
- Reduction in the bank and insurance tax rates to the new level of the general corporate tax rate, 7.5 percent.
- Further reduction of the gross receipts tax and other taxes on energy and telecommunications customers.
- Elimination of the petroleum business tax and the highway use tax.
- Further reduction of the alternative minimum tax, which primarily affects manufacturers and the securities industry.
Many other states have healthy revenues like Albany's--and they are considering or enacting tax cuts. These states include Pennsylvania, Texas, Florida, Michigan, Massachusetts, Michigan, Colorado and Wisconsin.
We urge lawmakers not to succumb to the inevitable temptation that accompanies good times: to spend imprudently without regard to the long-term tax burden. New York made that mistake only 11 years ago. We like to think the lesson has been learned.
Click here for a summary of the legislative leaders' different 1999 tax-cut proposals.
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