New York Revenue Plan: Tax Cut or Tax Hike?

By: - December 8, 2011 12:00 am

The income tax revision that New York rushed to passage this week puts both Democratic Governor Andrew Cuomo and legislative Republicans in an awkward political position.

Cuomo, who campaigned against higher taxes and long rejected his own party’s demands to raise taxes on the wealthiest New York residents, is facing criticism for supporting a plan that does exactly that. Anti-tax Republicans, meanwhile, are on the spot after all 32 GOP state senators went along with the plan, which raises nearly billion in new revenue.

What is allowing Cuomo and Republicans to label the plan a success is that the overhaul also cuts income tax rates for millions of middle-class workers, as well as many upper-class earners. That is why both sides are now focusing primarily on the tax-cut half of the equation.

“We’re cutting taxes, in my opinion,” Dean Skelos, the Republican leader in the state Senate, tells The Wall Street Journal . But “framing the tax code changes as a tax break,” the paper writes, “had Republicans sounding much like their political opponents who favor higher taxes for the rich.”

Just two years ago, Skelos blasted an income tax hike on the wealthy as the “coward’s way of doing it,” The Journal reports.

Cuomo, meanwhile, had to explain his shifting position, which he did in a video message earlier this week. “While I am against higher taxes, and I believe our long-term economic future for this state is enhanced by in fact lowering taxes to make us more competitive, to deal with this emergency, short-term, we do need additional revenue,” he said, according to The New York Times .

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