Hawkins Lays out State Fiscal Plan: Tax the Rich

For immediate release: October 10, 2018

Hawkins: Tax the Rich to Revitalize the Public Sector

Albany – Green gubernatorial candidate Howie Hawkins wants to tax the rich to pay for his Green New Deal program for revitalizing public infrastructure and services.

Hawkins said Wednesday that New York needs to invest on the order of $44 billion a year over the next decade to build a 100% clean energy system, to repair and upgrade the state’s infrastructure after decades of under-investment, and to fully fund education from universal pre-K through tuition-free education in the SUNY and CUNY systems. Hawkins also wants the state to pick up the tab for its unfunded mandates on and restore state revenue sharing so that local governments can provide better services while cutting regressive property and sales taxes.

“New York can afford these public investments if the rich pay taxes at the rates they did in the 1970s. 40 years of conservative fiscal policies promoted by both major parties have combined tax cuts for the rich with spending cuts on public services and infrastructure. This trickle-down economics hasn’t worked. They gave more money to the rich but it didn’t trickle down to the rest of us. It just made the rich richer,” said Hawkins, a retired Teamster from Syracuse.

“The upstate economy remains depressed,” Hawkins noted. “The whole state suffers from failing infrastructure, from the MTA and NYCHA to the more than 1,800 structurally deficient bridges across the state and crumbling water and sewer lines in our cities. Our fiscally distressed counties, cities, and towns cannot afford to provide good services. The tax burden has shifted from the progressive income tax to regressive local property and sales taxes. The state balances its budget on the backs of local property taxpayers through unfunded mandates,” Hawkins said.

Hawkins noted that the share of income going to the top 1% has grown from 12% in 1980 to 31% today. The top 1% had $375 billion in income last year.

“Raising taxes on the top 1% by 10% would generate nearly $40 billion in new revenue – and the very wealthy would remain very wealthy,” Hawkins said.

Hawkins wants to make the state income tax more progressive, retain rather than rebate the stock transfer tax, and claw back the Trump federal corporate tax cut windfall where it is not used by New York companies to raise wages and create new jobs.

Hawkins also called for ecological taxes on the use or abuse of limited natural resources. He supports congestion pricing for cars on scarce lower Manhattan land to help fund needed upgrades to the New York public transit system. He supports a progressive carbon tax - with rebates for low-income households - o make fossil fuel polluters pay for their abuse of the atmosphere by greenhouse gases and help fund the transition to 100% clean energy.

“We will lower the costs of living and doing business in New York through public provision of good services and infrastructure. That includes single-payer health care, public power, public broadband, and a state public bank. Costs will also be lowered through property tax cuts from increased state revenue sharing,” Hawkins said.

“ We can improve the business climate with good public investments that benefit everyone much better than we have with top-end tax cuts that only benefited wealthy families and corporations. Public services and infrastructure are the public avenues that enable private commerce to thrive,” Hawkins added.

Hawkins supports the New York Health Act, which would provide all medically necessary services to all New Yorkers through a single public payer. The annual cost ranges from $254 billion in a study by economist Gerald Friedman to $310 billion in a Rand Corporation study. Hawkins dismissed the concerns raised by those who oppose it as a radical increase in the size of government. Friedman estimated the annual savings in overall health care costs in New York at $45 billion.

Only a dogmatic anti-government fanatic would prefer to pay more through the private sector for less coverage through the public sector for full coverage. Over 90% of New Yorkers will pay less in taxes for health care than they now pay in taxes, premiums, deductibles, co-pays, and fees for uncovered services,” Hawkins said.

Hawkins said the state public bank would lower the costs of financing public infrastructure, private business, and mortgages and other consumer loans due to lower interest rates.

“It is more fiscally responsible to tax the wealthy upfront than borrow money from them by bonding and paying interest to them for it. But the scale of investments we must make immediately to address the climate emergency and our failing infrastructure will require borrowing. We should borrow from ourselves through a state bank on the model of the state Bank of North Dakota,” said Hawkins.

Hawkins noted that public banking can finance public infrastructure for as little as half the cost of going to Wall Street because it bypasses the fees, commissions, and interest that would go to Wall Street banks. It uses the state’s own deposits as reserves for loans and receives the interest back into the public treasury.

Hawkins provided a list the estimated costs and revenue sources for the Green New Deal. “This list is not a detailed tax and budget plan. It is a back-of-the-envelope estimate to illustrate the scale of our public investment needs and how progressive and ecological taxes can provide the revenues needed to meet those needs,” Hawkins said.

Estimated Public Investment Costs and Revenue Sources

Public Investments (per year over the next decade)

The New York Health Act is not included below because it sets up a segregated fund paid for by a separate progressive tax structure.

Infrastructure

$7 billion 100% clean energy by 2030 (1)

$4 billion Fix MTA (2)

$6 billion Repair NYCHA (3)

$4 billion Statewide infrastructure: roads, bridges, sewage and water treatment (4)

Education

$1.5 billion 3 years to catch up on $4.2 billion Foundation Aid cumulative shortfall (5)

$1.5 billion Tuition-free CUNY and SUNY (6)

State Mandates and Revenue Sharing

$8 billion Restore state revenue sharing to 5% of state revenues (7)

$10 billion State payment for currently unfunded mandates (8)

Social Needs

$2 billion Other social needs, including public defenders, lead abatement, raise welfare grants, community schools, universal pre-K, child care, wage theft enforcement, speedy trials, environmental clean-up and protection, capitalizing public bank, social wealth fund, etc.

Total: $44 billion

Revenue Sources

$10 billion More progressive income tax with multi-millionaire brackets (9)

$14 billion Stock transfer tax (10)

$4 billion Cut corporate welfare (11)

$1 billion Unincorporated Business Tax: Surtax on high-dollar pass-through income (12)

$5 billion Claw back Trump corporate tax cut not used to raise wages or create new jobs (13)

$3.5 billion Close the Carried Interest Loophole (14)

$5 billion Progressive Carbon Tax with 25% rebated (15)

$1.5 billion Congestion Pricing (16)

Total Revenues: $45 billion

We have used the investments estimated in a study of how to achieve a 40% reduction in greenhouse gases by 2030 in New York State and accelerated the investments proportionately to achieve a 100% reduction by 2030. The study conservatively assumes that each $1 of public investment will leverage $10 in private investment with the assistance of market incentives from a carbon tax and net metering. Robert Pollin, Heidi Garrett-Peltier, and Jeannette Wicks-Lim, Clean Energy Investments for New York State: An Economic Framework for Promoting Climate Stabilization and Expanding Good Job Opportunities , Political Economic Research Institute, UMass-Amherst, Nov. 2017, https://www.peri.umass.edu/publication/item/1026-clean-energy-investments-for-new-york-state-an-economic-framework-for-promoting-climate-stabilization-and-expanding-good-job-opportunities . MTA’s 10-year, $40 billion “Fast Forward” plan to upgrade the system. Does not include the Regional Plan Association’s estimated $62 billion in additional funding needed to expand the system to cover NYC transit deserts and Long Island commuters. NYCHA’s 5-year, 32 billion capital budget to current problems with lead, mold, boilers, elevators, and roofs. Comptroller’s Office, Growing Cracks in the Foundation: Local Governments Still Challenged to Keep Up with Vital Infrastructure Needs, September 2014. http://www.edlawcenter.org/news/archives/new-york/governor-cuomos-budget-again-shortchanges-new-york-students.html Based on James Skoufis 2014 Tuition-Free NY bill: https://www.rocklandtimes.com/2014/02/27/assemblyman-james-skoufis-proposes-tuition-free-ny-taxpayers-would-pick-up-tab-for-ny-residents-attending-suny-or-cuny-schools/ 4% of $168 billion in projected revenues for FY 2019. http://nyconstitution.org/issue-summary/Unfunded-Mandates Estimate based on Frank Mauro, “The Path Not Taken: How New York State has Increased the Tax Burden on the Middle Class and Cut Taxes for its Highest Income Taxpayers by Over $8 Billion a Year

8,” June 2005, http://fiscalpolicy.org/the-path-not-taken-how-new-york-state-increased-the-tax-burden-on-the-middle-class-and-cut-taxes-for-its-highest-income-taxpayers-by-over-8-billion-a-year

NYS Tax and Finance Dept, https://www.tax.ny.gov/pdf/2016-17_collections/2016_17_Collections_Report.pdf , Table 20, page 41. Alex Carmada, “Sunlight for Subsidies,” Gotham Gazette , March 15, 2018, http://www.gothamgazette.com/opinion/7542-sunlight-for-subsidies . Fiscal Policy Institute, Budget Briefing Book , 2018-2019, http://fiscalpolicy.org/wp-content/uploads/2018/02/FPI-Budget-Briefing-Book-2018-2019-FINAL-DRAFT.pdf Jim Brennan, “Federal Corporate Tax Cuts Just Gave New Billions to New York Businesses - What About the MTA?,” Gotham Gazette , Aug. 12, 2018, http://www.gothamgazette.com/opinion/7859-federal-corporate-tax-cuts-just-gave-new-billions-to-new-york-businesses-what-about-the-mta FPI, Budget Briefing Book , 2018-2019. Robert Pollin, Heidi Garrett-Peltier, and Jeannette Wicks-Lim, Clean Energy Investments for New York State: An Economic Framework for Promoting Climate Stabilization and Expanding Good Job Opportunities , Political Economic Research Institute, Umass-Amherst, Nov. 2017, https://www.peri.umass.edu/publication/item/1026-clean-energy-investments-for-new-york-state-an-economic-framework-for-promoting-climate-stabilization-and-expanding-good-job-opportunities .

16. Charles Komanoff, “Eight Reasons Why Congestion Pricing Goes Great With the Fast Forward Plan to Fix NYC Transit,” Streets Blog NYC, May 29, 2018, https://nyc.streetsblog.org/2018/05/29/eight-reasons-why-congestion-pricing-goes-great-with-the-fast-forward-plan-to-fix-nyc-transit/.