Better ways to balance state budget than stock transfer tax
Letter to the Editor
The editorial “Cure for New York's deficits,” June 21, asserts preserving essential services during the current financial crisis requires raising taxes, specifically reinstating the stock transfer tax. The reality is the state has several options to improve its fiscal outlook without implementing this anti-competitive tax.
The State provides needed funding for essential services such as education, health care and infrastructure, but its methods of allocating funding can be inefficient or even wasteful. For example, the state provides $1.6 billion in aid to school districts with more than enough local resources to fund a sound, basic education and spends $4.4 billion in economic development that has demonstrated little impact, particularly in upstate communities. This spending can be curtailed without hurting essential services.
The state has other options to balance its budget. These include $3.5 billion in rainy day funds, the ability to finance $3 billion in capital investments through bonds instead of cash, and strategically chosen tax revenues, such as delaying the Jan. 1, 2021 personal income tax cut and suspending the sales tax exemption on clothing, which could be a reasonable part of a sustainable, comprehensive and balanced package.
Such options are far preferable to implementing a stock transfer tax, which is unlikely to yield much revenue. Transfers can easily be conducted out of state, and businesses may opt to shift related staff there, too. Also, one proposal that would impose the tax on every trade initiated by a New Yorker would impact retirement and college savings accounts, too.