Governor William Patterson has called for a special session of the State Legislature to address the State's growing fiscal crisis . Unfortunately, his solution is to make one of the worst budgets ever even worse for working people by cutting deeper.
Patterson has proposed 7% across the board cuts in all programs (there goes the "restored" education budget.) and a state-wide hiring freeze. Sadly, he has simultaneously downplayed taxing the rich.
According to the New York Sun, Nobel Prize-winning economist and Patterson economic advisor Joseph Stiglitz, recommended different solution to the gov:
"New York, like most states, is now facing an unenviable choice: either taxes have to be raised, or expenditures cut," Mr. Stiglitz wrote. "When faced with such an unpleasant choice, economic theory and evidence gives a clear and unambiguous answer: it is economically preferable to raise taxes on those with high incomes than to cut state expenditures,"wrote Stiglitz.
Back during the budget debate, Assembly Speaker Sheldon Silver championed a 1% tax surcharge on millionaires which would have filled much of the budget gap. Recently departed Senate Leader Joe Bruno wouldn't let the measure come out of committee. The budget compromise included no new taxes on the mega wealthy or big corporations.
A while back the New York Times reported that many millionaires have no problem paying their fair share, especially during a recession:
Poor Donald. The rich cry too, apparently.
“I’m happy to do it,” said Arlyn Gardner, who did not hesitate to declare herself wholly in favor of a plan to raise income taxes on New Yorkers who earn more than $1 million a year. (That would include Ms. Gardner, a prominent philanthropist who splits her time between two homes, one on Fifth Avenue and one in Rye, N.Y.)
“I read about it, and I thought, ‘A lot of people won’t agree with this.’ But I say, ‘Why not?’ We pay taxes to help those who need it.”
Donald Trump is one who does not agree with the idea. “Foolish,” as he put it in a recent telephone interview. “I think it’s a great idea — if you are looking to force rich people to move to states like Florida,” said Mr. Trump, dismissing the notion that the wealthy should be expected to shoulder the burden when times get tough.
“In times of financial distress, the rich get hurt also,” Mr. Trump added.
Fact is, the debate about how to address the State's fiscal crisis and the general economic crisis in the country has been topsy-turvy. Thirty years of market extremist ideology and right wing rule has made "tax" a dirty word and narrowed the range of solutions in Washington, Albany and City Hall.
As Stiglitz points out, cutting social services is much worse for the economy than raising taxes. Government layoffs, and reductions in benefits and services that lead to less cash in the pockets of low-income and other working people all adds up to slowing the economy.
The argument that increasing taxes on the rich and the big corporations will slow the economy just don't hold up. Taxes on the rich are low. profits are up and wealth is increasingly concentrated in the hands of a few. A limited tax will not drive the jet-set from their Park Avenue suites to their Summer homes on the Cape.
Remember, the way we got out of the Great Depression wasn't by trimming our way out of the crisis. The government spent its way out of the crisis. Putting people to work on government public works and public services jobs means cash in pockets of people that actually spend it. This is the way to get the economy going. It was rampant unproductive and highly speculative investment in energy, housing and financial markets which caused this crisis. The "market" on its own, won't get us out.
The main measure of the budget's success should be its impact on the working people of our state.
Let's put pressure on our State Legislators to put the millionaire's tax back on the table and to say no to any additional cuts. Then come November, let's ensure that a new President and a new Congress are motivated to put millions of Americans back to work rebuilding this country for the Green Millenium.