Economic Justice

New York is the most unequal state in the country, and it doesn’t have to be. According to a brief by The Economic Mobility Corporation, financial gains in New York State have been so concentrated at the top of the income scale that the richest 5% of New York families now receive nearly 25% percent of total income, more than the bottom 60% combined.

From March 2020 to April 2022, New York’s 125 billionaires grew $228 billion, or 49%, richer over the first two years of the pandemic, according to Forbes data.  Meanwhile, approximately one in five New Yorkers lives in poverty and nearly half the city’s households are considered near poor.

It is our moral duty to fight inequality in New York State by closing tax loopholes, ending tax breaks for billionaires and corporations, and implementing a truly progressive tax code in New York State.

In my first term as State Senator, I helped to win the first tax increase on billionaires in over a decade; after a year of COVID-era campaigning by hundreds of allied organizations, New York state lawmakers enacted a budget with $4.3 billion in new revenue that taxes the rich and big corporations to invest in communities.

We also won bold, long overdue community investments, including:

  • A $2.1 billion fund for excluded workers, which provided survival checks to hundreds of thousands of workers who had been excluded by federal COVID relief programs
  • A $2.4 billion emergency rental assistance program to help tenants across the state, including undocumented tenants, stay in their homes during the COVID-19 crisis
  • A $4.2 billion investment phased in over three years for New York’s high-needs public schools, an important victory after 15 years of organizing for equity in school funding
  • $400 million in Medicaid, restoring proposed cuts to healthcare services
  • A $105 million expansion of universal full-day prekindergarten, providing pre-K funding to over two hundred districts that haven’t received state-funded pre-K

The issue of economic justice is closely related to the annual state budget, and New York has not gone nearly far enough in advancing the goal of true progressive tax reform. In fact, this year’s budget contained the largest public giveaway to an NFL team in history, which I voted against. I will continue to be a champion for the working class in Albany.

As State Senator, I will continue to fight for:

 

  • Revise New York’s income tax structure to tax the rich. The personal income tax is the state’s largest source of revenue, but it is not a fair tax. The income tax rate is approximately a flat 6.5% for all taxpayers making less than $1 million per year, leaving Wall Street bankers bearing the same tax burden as working class families. This year, we can pass legislation (S2622) to reform the personal income tax to make it a truly progressive tax, adding new and higher tax brackets for the wealthiest New Yorkers. We had tremendous and broad-based support for this bill in the prior legislative session, and we need to enact these changes as a permanent part of New York’s tax structure. 
  • Pass an Heirs’ Tax. Many of the wealthiest people in society make their money not from going to work, but from large inheritances. Working people pay taxes on the entirety of the income they make each year—the income they make from work—but rich people can make $5 million in a year through inheritance and pay no tax on that money at all. We can fix this by passing S3462 and taxing the inherited wealth of heirs. Only the top 1% of inheritances would be affected, and only amounts in excess of $250,000, but this simple change to the tax code would raise $8 billion annually.
  • Amend the New York State constitution to allow for the direct taxation of wealth. The New York State Constitution currently prohibits a comprehensive and direct wealth tax on the ownership of so-called “intangible” assets. It is important to realize that the property tax is, in effect, a tax on just that part of a person’s wealth that consists of “tangible” property, most commonly a person’s home. For the wealthy, who accumulate vast amounts of “intangible” financial assets, the property tax is in effect a tax on a very small portion of their wealth. This year, we can pass S4699, so that property taxes can be redirected towards the wealthiest New Yorkers, rather than disproportionately going towards middle-income New Yorkers. A wealth tax, unlike an income tax, would target accumulated wealth, and could serve as a means of reducing the economic inequality that threatens the stability of our democracy and keeps millions of working people living near the poverty line.
  • Tax financial transactions. Unlike other major financial centers like London and Hong Kong, New York currently doesn’t place any tax on financial transactions. The financial industry is the largest industry in New York State, making up thirty percent of the state economy. We can pass S3980 to places small taxes on trades of stocks, bonds, and derivatives, much like the similar tax on stocks that existed in New York until 1981. This change in the tax code would raise $9 billion every year.
  • Exempt unemployment benefits from taxation.  We saw during the early stages of the COVID-19 pandemic how unemployment benefits temporarily provide many workers with a fraction of their former income as a necessary lifeline. However, unlike many other states, New York currently taxes those unemployment benefits by treating them the same as ordinary “income.” This practice is regressive and unjustified. The neighboring states of New Jersey and Pennsylvania, as well as several others, already fully exempt unemployment benefits from income taxes. New York, which is already the most unequal state in the nation and which already severely under-taxes its wealthiest residents, does not. Instead of taxing the richest to pay for public services, New York has elected to tax some of its most vulnerable residents, who are the least able to pay. By passing S6630, and exempting unemployment benefits from taxation, New York will take a step in the right direction towards a more equitable tax system.
  • Institute a Capital Gains surcharge. Right now, the wealthy make much of their income from speculating in financial assets, rather than from working at ordinary jobs for wages. However, the federal government taxes investment income at a much lower rate than the income we make at our jobs. New York can fix this disparity by passing S2522 and adding a tax to investment income that’s equal to the tax break the rich are getting from the federal government.
  • Create a real corporate tax. In 2017, Trump’s tax cuts reduced the federal corporate profit tax rate from 35% to 21%, and reduced taxes on real estate businesses by 20%. New York can end these tax breaks by passing S2833 so that businesses pay the same tax as they did before the Trump presidency. Doing this would raise $9 billion in new revenue every year.
  • Establish The New York Public Banking Act. In contrast with much of the world (and North Dakota), our banking system in New York is entirely privatized. That means that New Yorkers place billions of dollars into private banks that routinely exploit and extract wealth from low-income communities and neighborhoods of color. Money that is earned by the working class is repurposed as finance capital that chases after the greatest profits it can find, regardless of the social costs. However, here in New York, we have an alternative: We can pass S17262B and establish a system of public banks that democratizes credit, directs New Yorkers’ money toward socially valuable projects, and ensures that working people have meaningful oversight over how their money is used.

 

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