Monday, August 9, 2010

Tax policy driven by burning tires on the highway?

Property taxes are regressive and a growing burden for many taxpayers.

When incomes fall, income tax liabilities automatically fall.

When retail sales fall, sales tax liabilities automatically fall.

When property values fall, tax bills have continued to go up.

It's a big problem for many struggling New Yorkers.

New York Governor Paterson and the front-running candidate to succeed him next year, Andrew Cuomo, have both called for a property tax cap. Last week, the NY Senate voted by an overwhelming majority, 51 to 8, to restrain the growth of property taxes in the state.

However, the NY Assembly has refused to pass the bill and seems very unlikely to change its mind. The Albany Times Union's Rick Karlin has an excellent analysis describing the politics behind the legislature's decision-making. Most Assembly members come from New York City, where property taxes are a less salient issue, due to the existence of the NYC income tax as well as the fact that a majority of voters there are renters, who see the impact of property taxes only indirectly.

But the article also quoted a legislative staffer with a vivid and colorful reason why the state government is unlikely to enact a property tax cap:

No burning tires: A Senate aide suggested another reason there's no property tax cap: "There aren't people burning tires out on the Taconic Parkway."

He was referring to the 1992 action taken by Senecas in western New York who, when faced with the possibility that tobacco sales on their reservation would be taxed, tossed burning tires and other debris onto the Thruway and Route 17, briefly closing the roads. Not until this year has the state proposed actually collecting those taxes.

In state politics as in so many other things, the squeaky wheel gets the grease. causes that have loud, well-organized groups behind them -- whether it's tax-free tobacco, rent control or AIDS research -- get attention and action. Everyone else is pretty much ignored.

Tax cap proponents, or homeowners, haven't really organized in a significant way, meaning the issue remains an abstract threat for many lawmakers.

The statement is a sad one for what it says about what it takes to get legislators to make tax policy in a rational, thoughtful, and fair manner.

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