Is Cuomo’s tax deal too cloak and dagger for a healthy democracy?
Governor Andrew Cuomo has been nothing if not consistent on the question of raising taxes for high-end earners: From his campaign through his latest duels with public employee unions, he condemned the idea.
It would, he argued, make New York state uncompetitive and might even drive millionaires out. This is a quote from October 17th:
“You are kidding yourself if you think you can be one of the highest-taxed states in the nation, have a reputation for being antibusiness—and have a rosy economic future.”
Then, last weekend, there was an abrupt about-face in the form of editorials, penned by Gov. Cuomo, which appeared in newspapers around the state.
Suddenly, the Democrat was describing the current tax code as unfair and suggesting that millionaires, in fact, do need to pay more, while middle class earners have their taxes cut.
It seemed like the opening salvo — a trial balloon maybe? — in a major new policy shift.
But in fact, that editorial was a quick “hold onto your hats” gesture, signaling that we were about to see a major shift in our tax code — as in, right now.
With no public hearings and no public debate, the governor had struck a behind-the-scenes deal with legislative leaders in Albany that will shift significantly more of the tax burden to the wealthy.
Regardless of what you think about the deal itself, it’s hard to view this as a shining example of open democracy and debate.
Yesterday, New York’s League of Women Voters, Common Cause and the Public Interest Research Group put out a joint statement questioning the process.
The announcement today of leadership’s agreement on a proposal to revise the state’s tax code responds to the call by many to make tax policy fair.
However, the process by which the deal was struck is a continuation of the backdoor-deal making that has defined Albany culture.
It is important that the people’s business – particularly policies that will directly impact the taxpayers and the economic health of this state – be conducted in the open.
The public should have an opportunity to learn of, and comment on, such important fiscal and policy matters, not simply be informed after the fact.
Matters of this magnitude should not be decided in secret, during the legislative hiatus and without a formal process.
Each of these important issues should be the subject of hearings and public discussions, with sufficient time for the public to understand and comment on what may be proposed or under consideration.
These concerns are underscored as these issues have not been the subject of recent hearings and the substance of today’s announcement has not been previously vetted through the formal legislative process.
Accordingly, the tax code should not be hustled through a special session, where these crucial matters are debated in closed conferences and then voted on the next day.
The point, really, is that if state officials can strike a good deal quickly and in secret (and again, it’s open to debate whether this is a good deal), what’s to stop them from doing really awful things quickly and in secret?
What do you think? Did this deal take you by surprise? Is it okay a policy shift of this magnitude occur behind closed doors?
Tags: economy, politics, tax policy
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I think you are witnessing Cuomo’s true nature.
Whether for “good” or “evil”, the deed is done in the shadows.
Its still a democracy and any and all of these guys are up for re election periodically.This particular issue (taxation of the rich and progressive tax rates in general) have been debated forever. We elect representatives to make tough decisions and this was one of them. That they thought they needed to do it ” in the shadows” says a lot about the power of lobbyists and us in general.
While I have some problems with the proposal and I have no desire to be a cheerleader for the governor, I feel certain the governor and others are merely reacting to calls and letters, plus OWS demonstrations.
Reacting to the “will of the people” is not limited to listening to special interest groups in the chamber – read: New York’s League of Women Voters, Common Cause and the Public Interest Research Group.
These groups only claim to speak for the people. There is not a dimes worth of difference between them and all others who lobby for this, that and the other thing.
I am referencing the wikipedia link below for this quote:
“Useful idiot” is often used as a pejorative term for those who are seen to unwittingly support a malignant cause through their naive attempts to be a force for good.
http://en.wikipedia.org/wiki/Useful_idiot
What Cuomo is hoping for, is an elective of “useful idiots” who nod their heads and close their eyes to what is happening.
I think it is a bad way to do business, and will lead to bad things.
JDM – what are you objecting to? Progressive income tax rates (brackets that increase with income levels)?
Peter Hahn:
I am objecting to the closed door procedure.
But, to directly address your question, a flat tax is a progressive and fair tax.
To overtax the rich to benefit the poor is redistribution of wealth.
JDM says “…a flat tax is a progressive and fair tax.”
Is that Fox News is telling conservatives these days? Incredible! Sure, and the wealthy are all Job Creators, as opposed to the rest of us poor slobs, who contribute nothing to the economy.
From Wikipedia ( http://en.wikipedia.org/wiki/Progressive_tax )
“A progressive tax is a tax by which the tax rate increases as the taxable base amount increases.”
As for “redistribution of wealth,” that is exactly what the wealthy have been doing to the rest of us ever since Reagan’s Voodoonomics became the rage in “conservative” circles.
I honestly don’t care all that much about how these deals are made. Behind closed doors, or via laborious open, public meetings.
I personally vote for someone because I think they will be the better leader and make the better decisions. I do not vote for them so that I can participate in their decision making process.
If they happen to make bad decisions (via an open or closed process), I simply won’t vote for them the next time around.
There is a fine line between participatory democracy and mob rule… I tend to prefer to err on the side of avoiding the latter.
Walker: I stand corrected. The actual definition of a progressive tax is as you say.
I was referring to the actual dollar amount, not the tax rate, in my own definition of “progressive”.
I take issue with your saying that the wealthy have taken their wealth from the poor. By what method is that?
So, why is it not a “redistribution of wealth”, and/or “class warfare” to cut programs that predomindantly benefit those who are in the lower income levels, but is if the ridiculosly wealthy are expected to pay a bit more in the way of taxes? Seems contradictory.
The primary ways the rich steal from the poor are by over charging for a product or a service and by underpaying for the labor. It’s really very simple.
The money game is simply buying low and selling high. “Whatever the market will bear.” How little can I pay and get away with it? How much can I charge and get away with it?
JDM – for the past 30 years we have been lowering the taxes on the wealthy and raising them on the poor (and reducing services that benefit the poor – e.g raising state college tuition). In this way, the wealthy have gotten wealthier at the expense of the poor. This is Walker and Dan Creazzo’s point.
What you conservatives do is make up new definitions for things – “redistribution of wealth” or “progressive” without thinking through the implications of those definitions or realizing that they can have very different implications than what you think.
Example: “life begins at conception”. It turns out that if you make this definition part of the legal code (as in Mississippi) it has all sorts of consequences that even in Mississippi they can’t go along with.
There are other definitions for “useful idiot”, both from the Urban Dictionary
#1. A person who blindly follows the Corporate-run American Plutocracy and will fight for its preservation at the cost of the rest of his countrymen’s wellbeing.
#2. A term Conservatives use for poor people who vote for them even though the Conservatives dislike poor people.
PNElba: the exact percentages vary, but, in general, the top 1% of income earners pay 1/3 of the tax burden.
The top 10% pay 2/3 of the tax burden.
47% of everyone pay nothing.
Not a good distribution. Certainly not an indication that the rich aren’t paying their fair share.
A flat tax is a much fairer and better solution. Everyone should participate, because everyone gets to vote.
JDM – your figures (if they are correct) refer to “income tax burden” not tax burden. Another inflammatory and misleading use of language.
Brian’s title question – In my opinion, no. The legislative leaders (of both parties) participated. They came to an agreement. This agreement still must be voted on by the legislators, correct? It is not currently law as I understand it. They put their heads together and came up with an acceptable policy as they see it. I say good for them. Sadly these days agreement in and of itself has become the litmus test for good governing.
“the top 1% of income earners pay 1/3 of the tax burden. The top 10% pay 2/3 of the tax burden. 47% of everyone pay nothing.”
Wow! I wonder why that is? Maybe the top 10% pay more because they make more. As for 47% paying nothing, that is simply a lie.
Obama laid out broad objectives for health care reform and left it up to congress in an open process. Congress got hammered by every lobbyist in DC and we ended up with a half ^$$ed reform that favors the insurance industry, better than doing nothing but not a lot.
He did the same with trying to get the deficit under control and got zilch.
So Brian thinks maybe Cuomo should follow that same plan?
peter and pnelba are right about jdm’s untrue tax claims. but it’s even worse yet — jdm is just talking about federal income taxes. everyone pays some form of state and local taxes. i bet even jdm has heard of sales tax, for example. everyone pays it!
it needs to be said again and again: no one should pay attention to anything jdm says. he’s not credible.
I think JDM just likes to bother people. Saying the top 1% and the top 10% pay all of the taxes and the other 47% pay nothing is not only not true, it is bad math!
It reminds me of the foolishness I’ve heard by some people who have said that renters don’t pay any property taxes. Oh, really? If you think that, you must think landlords are extremely generous people who don’t figure the property tax into the rent.
JDM also forgot to mention all the corporations that pay no federal taxes. But I’m willing to bet he has no problem with that.
I don’t know– I think JDM provides a useful service in this otherwise mostly progressive forum,. For instance:
“I take issue with your saying that the wealthy have taken their wealth from the poor. By what method is that?”
Well, for starters, I didn’t say they got their wealth from the poor. They got their wealth from “the rest of us,” i.e., the non-wealthy, the 99%. And I could simply point out that they got it from us because there’s no place else to get it from (Willie Sutton logic).
But you’ve certainly heard of the banksters who intentionally constructed portfolios of bad mortgage securities and then sold them short, netting huge profits in the process? That siphoned money out of the pockets of middle-class investors into the bank accounts of the hyper-wealthy. Then there are those carefully crafted bank policies, where the bank pays your largest checks first each day, sometimes triggering multiple inflated overdraft fees on all your smaller checks. Ditto for them helpfully never refusing a credit card overdraft.
And you can’t be unaware of Bernie Madoff and Enron and Worldcom, and the S&L crisis of the Reagan era. There are so very many examples, I’m sure if we put our heads together, we could come up with many more. Here’s a good link: http://sanders.senate.gov/newsroom/news/?id=0de079ee-718a-4c7b-a8c5-4ea2ce6f3d01
Speaking of our progressive tax structure how about examples like Bank of America earning $4.4 billion in profits last year and filing for a $1.9 billion tax refund, this coming AFTER the massive taxpayer-funded bank bailout. Or Exxon earning $19 billion in profits in 2009 and not only paying no taxes, but claiming a $156 million rebate from the federal government? Should I go on?
To answer Brian’s question, NY state has always been about the three men in a room, and Cuomo’s been able to bully the other two into doing whatever he wants. So yes, it’s not great for democracy, but that’s nothing new in this state.
On the other hand, as Pete pointed out atop this thread, Cuomo’s reacting to OWS changing the conversation, making it about the 1% vs. the 99% (see Walker above), which really is broader-based democracy in action.
And JDM, as for “the top 1% of income earners pay 1/3 of the tax burden.”
It happens that the top 1 percent of Americans now take in roughly a quarter of the country’s total income, so even under a straight flat tax, they’d pay fully a quarter of all federal income taxes. So the fact that they now pay a third shows that our tax system is far from being confiscatory.
And don’t lose track of the fact that we’re just talking federal income taxes here– if you factor in payroll taxes, and state and local taxes, the proportion paid by the wealthiest would necessarily be considerably lower.
And remember, under Eisenhower, the top tax rate was 90%, and the economy still managed to grow. And Eisenhower was no socialist!
“the top 1% of income earners pay 1/3 of the tax burden. The top 10% pay 2/3 of the tax burden. 47% of everyone pay nothing.”
1%+10%+47%=58%
Q: what are the other 42% up to?
..and in regards to Cuomo’s method for getting it done, rather than throwing it on the floor of the assembly for it to get the “dog pile on the rabbit” treatment, he did operate kinda below the radar to avoid lobbyists, this time for an honorable reason most can get behind. What about next time?
maybe it’s simplistic to think that with all the other “things” we need to hash out i would shout yes for the end of ALL lobyists. They essentially take the voice(s) away from the common individual. By the time one gets to vote, participate, in the process, it’s long been massaged by the invisible hands.
we’re a long time gone from when the common man, woman, could go up to the kitchen screen door of the white house and talk to the prez.
Why should a lobbyist be able to? who started that scam? and why on earth is it accepted as S.O.P. ?
And why if the people, in frustration, organize into an occupy whatever street, is it broken up like a common street gang?
“What are the other 42% up to?”
I think the answer is that the “top 10%” includes the “top 1%” (and their third of all taxes) so we’ve only accounted for 2/3 of all federal income tax revenue. So the other third is payed by the other 42% of taxpayers.
To put it more clearly, the top 1% pays a third, the next 9% pays the next third, and the next 42% pay the last third.
Hey math whizzes:
1% + 10% pay 2/3 of the tax burden.
47% pay no taxes. The “lower-middle” 42% pay the other 1/3. Boy, that was tough.
PNElba: the fact that some corporations pay no taxes is crony capitalism. GE among them. Obama’s best buddy.
Cuomo will do the same. Raise the taxes on the rich to punative levels, then grant “favors” to political allies and punish political foes using the IRS (and NYS tax dept) as the new gestapo.
JDM
1% + 10% have all the stuff.
khl:
JDM
1% + 10% have all the stuff, and if they pay a flat rate on it, it’s a lot more than the rest pay.
15% x 10,000,000 = $1,500,000 in taxes, for example.
15% x 10,000 = $1,500 in taxes.
That’s fair.
I thought I would help some of the posters out with the math.
JDM are you now claiming that President Obama is in favor of companies paying not income tax? Are you saying the President of the United States is the person who determines whether GE will pay taxes or not?
Last I heard President Obama wanted companies to pay their fair share. Last I heard it was congress that determined income tax laws.
hey JDM-
@December 7, 2011 at 12:53 pm
“….the exact percentages vary, but, in general, the top 1% of income earners pay 1/3 of the tax burden.
The top 10% pay 2/3 of the tax burden.
47% of everyone pay nothing.”
@December 7, 2011 at 5:49 pm
“Hey math whizzes:
1% + 10% pay 2/3 of the tax burden.
47% pay no taxes. The “lower-middle” 42% pay the other 1/3. Boy, that was tough.”
true, i’m not a math wiz, but i do read fairly well, and these two posts do not say the same thing. not trying to nit pick,
i’m just sayin’….
JDM – most people – especially the lower half pay mostly medicare and social security tax for their federal tax. Those are flat taxes and they are fairly substantial.
Repeating that old saw “47% pay no taxes” means that either you are very gullible or intentionally misleading – repeating propaganda that you know to be false.
I see nothing wrong with a thoughtful man changing his mind. I understood his position on the competitiveness issue, and I understand that, in the end, you just have to do the right thing…and not wait on Washington
Peter Hahn: Repeating that old saw “47% pay no taxes” means that either you are very gullible or intentionally misleading
Oh, come on Peter. You’re not advocating raising Medicare Tax on the millionaires, are you? We’re clearly talking about income tax.
Once you get 50% +1 of the people not paying income tax, then there will not be enough of the others left to vote them down. They can vote themselves raises ad infinitum.
Two cents: I re-read the two posts. I seriously don’t see any difference.
If you’re hung up on 1% pay 1/3, and 10% pay 2/3, think of it this way. Percentile 2-10 make up 1/3, and the top 1% make up 1/3.
By the time you are looking at the top 10%, you have to re-include the top 1%. (you don’t add 1/3 + 2/3, in other words)
I can’t think of anyway to explain it clearer, sorry.
JDM, why do you feel it is necessary to defend the rights of the people who benefit the most from a safe, civil society from paying for the society that keeps their ability to amass that wealth intact?
It is a darned good deal for those at the top to pay whatever the percentage is. In fact most of those in the top 1% are not claiming that they are being unfairly taxed. It is the people who make far less who are asking for the top 1% to be excused from paying more. Why?
khl:
It is the people who make far less who are asking for the top 1% to be excused from paying more. Why?
I come from a different world view, khl. I can’t satisfy your answer, because we fundamentally disagree.
I don’t expect anyone to pay for my possessions, the health of me or my family, or my future gain. I am responsible for all those things.
Neither do I expect to pay for any of your possessions, health, or future gains.
My answer is “leave the wealthy, alone and go out and get your own wealth. The only one stopping you is you”.
JDM – I am simply pointing out that the 47% that “pay no Federal Income Tax”, do indeed pay Federal payroll taxes (Medicare and Social Security), that look and feel to them just like Federal Income Tax. Many don’t even know they aren’t paying “income” tax, because the taxes all go to the same place and look the same. The Payroll taxes are flat taxes normally at 6.1% of income (Lower percentage for the wealthy). Obama wants to reduce them temporarily to 3.1% but the Republicans are opposed.
The point is that claiming that 47% pay no taxes or pay no Federal taxes is false and inflammatory. One has to be gullible or disingenuous to repeat that old saw.
So JDM, when someone robs your house, are you going to track them down yourself and repossess your stolen stuff? Careful punishing the burglar– you could get yourself in real trouble!
When your house catches fire, are you going to put it out yourself if you can, and if you can’t, oh well?
Did you refuse your employer’s health plan, and buy your own as an individual? If not, you know that others are paying your health plan when they pay your employer for their services.
Do you make sure that your doctor and his nurses attended only private schools? Otherwise, you’re an indirect beneficiary of public education funding.
Do you find yourself itching to get out there and repair or build yourself some bridges and highways? It must irk you no end that you have to drive over those socialist structures.
Ever go to a library? No, I guess you’d find that repulsive– books you didn’t pay for and all.
You know, your investments benefit from regulation from institutions provided at public expense. Or do you just keep gold in your home safe?
How do you deal with all the subsidies that go into the food and fuel you buy? Must make you feel like a mooch!
And how about that Internet– I bet you’d rather pay the full cost of providing it, right?
Are you an employer? How many of your employees went to public schools?
Hey, how about that military? Let’s abolish it– each man for himself!
Etc.
You “conservatives” live in such a fantasy world! You can’t go back to 1776. We were a nation of farmers then– you didn’t need an FDA to keep your food and drugs from being poisoned by some big industrial complex, and you could defend the nation with a few long rifles and a few horse-drawn canon. You had no monopolies trying to bleed the country white– that came with the railroads, and it took federal action to keep them from destroying the economy completely.
And even then there were public schools, public police and fire departments, and, of course, a military above and beyond those volunteer farmers.
The only way you could be truly independent today would be to buy yourself an island, and make everything yourself from materials available on your own land. Otherwise, you’re sure to be benefiting from some publicly funded services, if only in your relative security from armed marauders. Speaking of which, look out for those pirates!
Since the top 20% of Americans own 93% of the wealth then they(the top 20%) should pay 93% of the taxes. Do they?
Walker:
You mix the good with the bad.
We need to unite for defense, and we a means to adjudicate rights.
We could have a very functional private fire department, library system, school system, health system, poison control, and mail delivery, etc.
In most cases, we have both a functional public and private system. In most cases, the private system outperforms the public system by every metric.
We could easily wipe out 75% of our government, the entire IRS, cut taxes on everyone, and live happier, be wealthier, and have more freedoms.
We disagree fundamentally on these points, but to the extent that 2012 brings the hope of change, we may see a little glimmer of what a smaller government will look like.
If this discussion is any indicator than folks have certainly gotten the “class war” that some were hoping for.
Peter Hahn:
I don’t know how the final dollar amounts work out, but the tax credits and earned income credits given to the lower income brackets probably mostly or completely offset any FICA, Medicare/Medicaid taxes.
“all the corporations that pay no federal taxes.”
They would pay under the republican budget that was drawn up by the house.
The top 20% have slightly over 87%(up from 85% pre George W’s recession) of the wealth in the country. Yet only pay slightly over 50% of the tax burden.
The Ryan budget that adds 6 trillion dollars to the public debt?
Good government groups like to complain about backroom political deals and the lack of transparency, but they are a voice in the wilderness. That’s the way politics has always been done and the public doesnt seem to mind.
JDM – you should get the numbers before you make sweeping statements like that. “earned income credits given to the lower income brackets probably mostly or completely offset any FICA, Medicare/Medicaid taxes.”
But I think the bottom line is that this is a good deal for NY. We have one of the largest income disparities in the nation between rich and poor, right down there with Mississippi. NY needs to tax those guys living down there in the City making hundreds of millions per year, imagine, hundreds of millions per year, in INCOME! I mean I am not talking about their estate, but how much some of those guys make in a year. Frankly it is kind of sickening.
There is no reason that NYS with the wealth that is generated by these rich bastards; should have the same poverty rates as many poor southern states. Now THAT is class warfare baby! But then again we also have the highest tax rates in the nation and where does that money go? Not to the poor and vulnerable that is for sure. So yes raise the taxes on these guys but we should have no illusions that all that money is actually going to go to those who need it.