Talking Points on Taxes

Theological/Ethical Reflection

• Treatment of the poor is a consistent Biblical measure of governmental justice.
• Government responsibility for the common good includes a just sharing of resources and protecting the most vulnerable. Thus government should provide essential services.
• Budgets are documents that show how money is expected to be collected and spent. As moral documents, they should reflect values of equality, opportunity and justice.

Tax and Spending Background

• The disparity between rich and poor continues to grow. NY still has the greatest gap between rich and poor.
• Such disparities divide the human community and are damaging to its members.
• The problem is not caused by lack of resources but how they are shared, distributed and made accessible.
• Foreclosures and growing unemployment create increased demand for government services.
• When taxes are reduced for the wealthiest citizens, it reduces the government’s capacity to provide services for our most vulnerable citizens, thus hurting programs that strengthen communities.

Present Situation

• During the last two decades, NY taxes have become more regressive.
• Property taxes have increased dramatically, affecting low and middle income earners more since they pay a larger % of their income for housing.
• At the same time NY has reduced its top personal income rates.
• The tax cuts of 1994, now fully phased in, have resulted in the state collecting 16 billion less than it would had they not been enacted.
• The state has also reneged on its revenue sharing commitments with municipalities leaving local taxes to make up the difference.
• Cuts in taxes equal loss of jobs. ∙
•     cuts in funds for infrastructure means labor jobs lost.
•     cuts in funds for social services means service provider jobs lost.
•     loss of labor and service provider jobs means loss of buying power
      by these groups, thus cuts means jobs lost in retail sector.

What Would Help

• For the Long Term, focus on shifting the burden from property tax (regressive) to income tax (progressive). 
•     This can be done by increasing top marginal rates on wealthiest 
      wage earners.
•     It is unfair for a family making $45,000 to pay the same rate as one
      making $4.5million.
• In the short term, property tax can be linked to income in a more targeted fashion.
•     STAR does not take the size of the tax bill into consideration.
•     A1515/S1053 would help those with incomes under $200,000 and have lived in their homes for at least 5 years by how much 70% of taxes exceeds income by:
  ∙ 6% of income if income is under $100,000
  ∙ 7% of income if income is between $100,000 and $150,000
  ∙ 8% of income if income is between $150,000 and $200,00
• Oppose cap on property tax hike.

6/2008