New York Governor Andrew Cuomo (D-NY) and Assembly Democrats have joined together to champion $2 billion in tax hikes in the annual budget. The hikes target everything from ridesharing (Uber, Lyft) and electronic cigarettes to an internet sales tax and raising the state income tax. Just as federal tax reform is taking effect, the last thing New Yorkers need is for those savings to be confiscated through Albany’s high tax policies.
Here are a few of the more egregious of the $2 billion in tax hikes:
A $276 million tax on ridesharing services such as Uber and Lyft and limousine services. The tax will fund “transit sustainability,” presumably repairs to New York City’s deeply troubled subway system. Surprisingly, the tax targets ridesharing customers rather than subway customers to pay for the repairs. Unfortunately, all the tax will accomplish is making transit and transportation more expensive for New Yorkers.
*A $109 million internet sales tax. The tax would apply to all internet sales done by people or businesses located within New York to New York customers. The tax would put New York businesses at a disadvantage, as their products would be subject to a 4% sales tax that out of state products are not.
*Limiting the Property Tax Relief Credit, costing homeowners $505 million. The tax credit is currently limited to homeowners with annual income below $275,000. Governor Cuomo proposes slashing the credit to the 2017 rebate value. This reduction eliminates crucial relief from New York’s high taxes.
*A tax on e-cigarettes of 40 cents per fluid millimeter, costing vapors $12 million. The tax comes at a time when the international consensus is that e-cigarettes are 95% safer than traditional combustible cigarettes and help transition smokers away from more dangerous traditional cigarettes. Increasing e-cigarette prices through taxation only makes it harder for smokers to quit traditional cigarettes.
Given New York is ranked number one in the country for the highest tax burden, it’s no surprise that 1.75 million people with income exceeding $99.5 billion have fled the state over the past several decades. Rather than continue to push residents to flee to friendlier tax territories, Governor Cuomo would be wise to provide real tax relief to New York residents.
*New York’s budget passed the Assembly and Senate on Saturday, March 31st. Republicans, who hold a majority in the state senate, were able to block the tax hikes with asterisks. However, Cuomo successfully kept his $276 million tax on ridesharing services in the budget.