Going over the fiscal cliff would cost New Yorkers $43 billion in tax hikes, state Comptroller Tom DiNapoli warned yesterday, as President Obama and congressional Republicans remained at a stalemate.
DiNapoli said New York would also lose $609 million in federal education, housing, health and human-services aid if sweeping federal-tax increases and sharp spending cuts take effect as scheduled Jan. 1.
“There’ll be a real hit on New York taxpayers if current law continues and they don’t make adjustments,” DiNapoli said after presenting his fiscal-cliff analysis to the Business and Labor Coalition of New York.
That’s especially true “at a time that our economy has been struggling, our [state] budget is fragile in terms of balance, and we are just beginning to feel the effects of the impact of Hurricane Sandy,” he added.
In addition to a spike in income-tax rates set to take effect, a scheduled 47 percent increase in the payroll-tax rate would cost New Yorkers $7.6 billion in 2013 and immediately reduce paychecks, according to DiNapoli.
Another 3.4 million New Yorkers, on top of the existing 500,000, would have to pay the Alternative Minimum Tax aimed at high earners – costing them $5,180 more on average than under this year’s tax provisions.
Families would lose $500 for every child claimed under the child credit, while a family with two children that pulls in $34,000 a year would lose $1,000 in tax credits from changes in the Earned Income Tax Credit.
DiNapoli also warned that New York is facing other economic problems from a shrinking Wall Street that he said has lost a net 1,200 jobs since the start of 2012 – and is likely to shed even more jobs with Citigroup’s announcement that it will cut 11,000 positions globally.
The impact of the layoffs on Wall Street and New York City is “not going to be anything good,” he said.
DiNapoli’s warnings came as Obama and House Speaker John Boehner continued to battle over competing plans to avert the fiscal cliff – a combination of $600 billion in spending cuts and tax hikes.
Obama wants to raise $1.6 trillion over the next decade in new revenues, largely by letting Bush-era tax cuts on households earning more than $250,000 a year expire.
Boehner’s proposal would raise $800 billion in revenues by closing tax loopholes, but he has insisted he will not support raising tax rates.
“I’m not going to sign any package that somehow prevents the top rate from going up for folks at the top 2 percent,” Obama said.
But White House press secretary Jay Carney refused to say the top rate must end up at the scheduled Clinton-era level of 39.6 percent.
Obama traveled to Virginia to meet with a middle-class family that wrote the White House about concerns that their taxes would rise if the fiscal cliff isn’t averted.
“Everybody is going to have to share in some sacrifice, but it starts with folks who are in the best position to sacrifice,” he said.
Sen. Charles Schumer (D-NY) crowed, “I think it’s firmly established that the Republicans are playing with a weak hand on the issue of taxes.
“The question is when they’ll admit it . . . not if.”
Source: NY Post