Thursday, March 08, 2007

Time for a Progressive Income Tax?

Property values are shooting through the roof, which means the property tax burden is weighing more heavily on working class families. So it's no surprise that a Marist Poll released today of Dutchess and Ulster Counties found that:
"65% think [school] funding should be based on the state's income tax to achieve a more equitable contribution among taxpayers."
This poll is another demonstration that the public is ready to replace the school property tax with a progressive income tax. It's time for legislators who are serious about reforming our school funding mechanism to look at a progressive income tax as the solution.

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3 comments:

irv feiner said...

it is incorrect to say, "

"Property values are shooting through the roof, which means the property tax burden is weighing more heavily on working class families." Property values can explode---but if school spending does not---property taxes remain the same. The real problem comes from the fact that property taxes are not based on the ability to pay---and that is why we should switch to an income tax-----and my plan roughly: is this:
1-outside NYC resident tax levy is 9.15 billion ( we don't include the city b/c the city raises 40% of its revenue from prop. taxes ---outside nyc 80%)
2--get rid of prop taxes
3--taxable income outside nyc is 245. billion
4--we replace the 9.15 revenue lost by dropping prop. taxes with a 4% surtax on taxable income.
5--this yields 9.8 billion
6-before u complain about a flat surtax--consider this
7--more than 90% of taxpater will see savings
8--it is easy to explain --telling people to go to line 37 of state tax return and multiply taxable income by 4%-----
9--the savings come from shifting the burden for working families to the 3.8% that 40 of state income
irv feiner

Jon Greenbaum said...

Spitzer's budget PowerPoint identifies NY as having the highest tax burden on any state. We know that we don't have the highest income tax and the highest sales and excise tax. So one has to assume that our property taxes are driving our taxes up. We know that property taxes downstate are really high. But are the property taxes upstate that much higher than the national average? Is the total tax burden of upstate New Yorkers higher than the national average? This distinction between upstate and downstate tax burdens is particularly important given that the Business Alliance is breathing down Gunderson's neck to create a maquiladora out of Upstate.

Quentin said...

If you go to
http://www.census.gov/compendia/statab/2006/tables/06s0464.xlw
(you will need Excel to view it), you will find that the government received 1.1202 trillion dollars from income taxes, personal and corporate, in 2005. This is the last year for which numbers are available.
I did some checking around and I found that the value of all the assets traded in all of the American stock and commodity markets totals over twenty trillion dollars annually.
Let’s do some math: 1.1202/20=.05601.
If our government taxed the purchase of stocks and commodities at a mere 5.6%, they would raise the same amount of money they do now.
If the tax rate was 10%, the extra 879.8 billion dollars every year could retire the National Debt in a little over ten years.
A simple plan.
As it is now of course, most people pay more than 10% of their income in income tax. Many corporations end up paying far less than that amount, and would naturally be opposed to any changes in what they themselves have wrought with their corruption of Congress.
The plan is voluntary in that no one would be forced to buy stocks or commodities. Of course, most people would probably want to invest their money, having more of it.
The corporate media will say that a tax on investment reduces investment.
Does a tax on working reduce working?
The corporate media will say that this plan is inflationary.
Don't believe it. (What causes inflation and what it really is are the subjects of another essay.)
Gains on stocks and commodities are currently taxed at either regular income or long-term capital gains rates—which are both higher than 10%.
As more people invested in America, the revenues to the Treasury would increase. The revenues to the businesses traded would increase, stimulating the economy—honestly, not like it is now with manipulation. The capital that would spread among “We the people,” would raise the standard of living for all Americans—not just the few. The concentration of wealth would ease.
Besides corporate America—and the multinationals traded in America—there would be strong opposition to this idea by other powerful interests.
The instruments of the National Debt are held mostly by banks and foreign governments (you would be amazed if you knew how much we are in debt to China!). Some of these instruments pay interest of close to 15%, but if we were to use a modest figure of 5% interest overall, we are paying just about 445 billion dollars a year in interest. The folks on the receiving end of that 445 billion are going to oppose anything that would threaten their golden goose.
General Motors bought a car company a few years ago for 67 billion. With this plan, they would pay 6.7 billion in taxes—far more than they have ever paid, but closer to their fair share. They would be against it.
Finally, let’s not forget the people who make close to twenty billion a year figuring out taxes. I’m sure they would oppose this idea too.
The odds are against us—unless we speak up.
If you don’t think this is a good idea, I want you to do something. Your personal share of the interest on the National Debt comes to just over four dollars a day. Take four dollars for every person in you family and flush it down the toilet. Do this every day for a year. What will you have to show for it?
Exactly what we have to show from paying interest on the debt. The debt doesn’t go down one bit. In fact, it’s climbing about 23,000 dollars every second. If we don’t tame the debt—and soon—we have damned our future as a country. When the creditors come calling, and we don’t have the money to pay them, they own us.
If you think this is a good idea; a fair idea, forward it to everyone you know. Ask them to forward it to someone else.
Maybe if enough people heard about it, something good will come of it.