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Thiele: Bring Tax Fairness and Property Tax Relief to New York

Let's extend the "Millionaire Tax" and provide much needed property tax relief.

As we approach the start of the 2012 State Budget in Albany, the most discussed issue is the extension of the so-called Millionaire Tax. The proposal would extend for another year the existing tax rate on those earning more than a $1 million a year at 8.97 percent.

The rate on millionaires would be reduced to 6.85 percent on Dec. 31 if no action is taken in Albany. The surcharge generates upwards of $4 billion a year. Proponents state that the additional funding is necessary to maintain state spending and programs. Opponents say the additional tax will injure the states economic recovery.

In 2009, I voted against this tax surcharge because the surcharge was imposed not on millionaires but those with incomes of $250,000 or more, and the revenue was used to fuel one of the biggest spending increases in New York State history. We could ill-afford such a tax and spending policy in the middle of a recession.

Under Gov. Andrew Cuomo, the state of New York has begun to get its fiscal house in order. A $10 billion budget deficit was eliminated with no new taxes or borrowing. Medicaid costs were brought under control. State bureaucracy was consolidated. A 2 percent real property tax cap was implemented to control local government property taxes. However, we are far from finished. 2012 will be a critical year to move New York State forward.

Here are the facts: If the tax rate returns to 6.85 percent for those making $1 million or more, they will be paying the same tax rate as a family of four making $40,000 a year.

Although I represent the Hamptons, not one millionaire has contacted me to complain about the 8.97 percent rate or has said they are leaving the state. At the same time, my office continues to be inundated by middle class residents who are being overwhelmed by real property taxes. Many have left the state. The 2 percent property tax cap was a good first step, but only a first step. New Yorkers need property tax reduction, not just a cap. We don’t need to give state government more money to spend, but we do need to have a fair tax policy reflecting the ability to pay.

That is why I am sponsoring A. 7673. This legislation is quite simple. It would extend the existing 8.97 percent tax rate on millionaires. The legislation would also create a real property tax “circuit breaker” program for middle class homeowners earning $250,000 or less. The legislation would cap property taxes based upon a percentage of income reflecting the ability to pay. Excess property taxes would be refunded through an income tax credit. This would reduce property tax payments by the middle class by $2.3 billion dollars. The remaining revenue would be placed in a separate account for state aid to education, further reducing school taxes and maintaining education quality.

The combination of the 2 percent property tax cap, the middle class circuit breaker property tax credit, and shifting education costs to the state income tax and away from the local property tax would provide real tax relief for working and middle class New Yorkers. It is fair and equitable and is the path to real economic recovery for Long Island and all of New York.

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Preliator November 18, 2011 at 06:14 PM
What are your thoughts on a flat tax for the citizens of New York?
Kevin. November 18, 2011 at 06:38 PM
You should reconsider your support for this tax increase. The ecomony is in even worse shape than in 2009. It is not the time for you to support an increase in taxes for your constituents earning $250,000 per year. And, there is no such thing as a circuit breaker in the state or federal tax code. Would it be more appropriate then, for the tax to be renamed the "quarter of a mililionaire tax"? Let review what happens under this plan for the real estate taxes of those that earn $250,000: "Maximum Real Estate Property Tax-No Limitation". You stated "In 2009, I voted against this tax surcharge because the surcharge was imposed not on millionaires but those with incomes of $250,000 or more, and the revenue was used to fuel one of the biggest spending increases in New York State history. We could ill-afford such a tax and spending policy in the middle of a recession." What has changed?
Mary Beth November 18, 2011 at 08:00 PM
"It would extend the existing 8.97 percent tax rate on millionaires." This is not a tax hike on people making $250,000 and makes sound fiscal sense. Governor Cuomo has been balancing the budget on the backs of the middle class while hurting schools and giving tax breaks to millionaires. When does it end? These policies have destroyed our economy and done nothing to create jobs. Nothing. Enough already. The 99% are finally being heard. I am not a fan of Mr. Thiele, but I support this idea.
Mary Beth November 18, 2011 at 08:02 PM
A huge share of the nation's economic growth over the past 30 years has gone to the top one-hundredth of one percent, who now make an average of $27 million per household. The average income for the bottom 90 percent of us? $31,244.
Mary Beth November 18, 2011 at 08:08 PM
A flat tax = huge tax break for the wealthiest and huge tax increase for the poorest.
Bojames November 18, 2011 at 08:51 PM
"Fairness" should include "Clergy" paying their own taxes on PRIVATE property currently receiving a $1500 exemption under NYS Real Property Law 460. Is this the late 1800s when this practice started to subsidize poor clergy? Clergy who are wealthy enough to own their own homes should pay all their own taxes , I do. Remember,exempted taxes are still needed and collected...from others.

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