Forum Post: This is not a spending problem, its a revenue problem in NYS
Posted 12 years ago on Nov. 2, 2011, 11:35 a.m. EST by madeinusa
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In 1972, New York State had a personal income tax with 14 brackets, ranging from a low of 2% to a high of 15%.
Since that time the state government has significantly restructured the state personal income tax in a variety of ways. Among the changes that have been made since 1972 has been a move to something that is much closer to a flat tax. This has been done by eliminating brackets from both the bottom and the top of the old structure.
For example, the lowest rate in the old structure was 2%. But the 2% and 3% brackets have been eliminated, so the lowest rate is now 4%.
At the other end of the spectrum, even more brackets have been eliminated. The 15%, 14%, 13%, 12%, 11%, 10% 9%, 8%, and 7% brackets are all gone.
New York now has a 5-bracket/5-rate system, with both the 5 rates and the 5 brackets in very tight ranges.
All five of New York's current rates are between 4% (the current lowest rate) and 6.85% (the current highest rate).
The most profitable industries in the world (energy, healthcare, finance) have been given billions in government handouts and tax breaks. Meanwhile, they keep raising charges causing hardship for millions. With all those massive handouts, tax breaks, and obscene charges, profits rise to record high levels. Millions in bonuses are paid to the executives. With record high profits, record high dividends are paid. 40% of all dividends in the United States are paid to the richest one percent. The bottom 90 percent of Americans share about 10 percent (that's ten percent) of all dividends. The rest are paid to the top 5 percent and foreign investors. All of this causes a gradual concentration of wealth and income. This results in a net loss for the lower majority who find it more and more difficult to cover the record high cost of living, which again, is directly proportional to record high profits for the rich. As more and more people struggle to make ends meet, more and more financial aid becomes necessary. Most of which goes right back to the health care industry through Medicare, Medicaid, and a very expensive prescription drug plan. This increases government spending. This has been happening for 30 years now. During the same time, tax rates have been lowered drastically for the richest one percent. Especially those who profit from investments. These people pay only 15 percent on capital gains income. As even more wealth concentrates, the lower majority find it more difficult to sustain there share of the consumer driven economy. Demand drops as more and more people go broke. Layoffs results. Unemployment rises. This results in less revenue and more government debt.
Massive subsidies and tax breaks for Wall Street, massive tax breaks for the super rich, heavy concentration of wealth, record high charges along with record high profits and record high cost of living, more hardship for the lower majority, more government spending in the form of financial aid to compensate, more concentration of wealth, less demand, layoffs and unemployment. All of this results in slower economy and less tax revenue. At the same time more and more financial aid becomes necessary. It's a horrible downward cycle which gradually pushes the national debt higher and higher. The other big factors are the wars in the Middle East.
This post is not intended to excuse those who sit on the couch collecting welfare, make no attempt to find work, or squease out kids they can't provide for.
So since 1972 the level of government services has not increased? The number of people receiving government aid has not increased? Those levels have not continued to increase year after year with no decreases? Your statement that it is a revenue problem is disingenuous.
NYS has been passing it costs on to its employees and local governments. In addition population has increased while NYS employees and total government has decreased. If you want to say there has been an increase in State government it has been appointees, private company consultants and politicians pet projects.