Don't Tell New Yorkers To Take A Tax Hike

By James Oddo

Oliver Wendell Holmes once said that taxes are the price we pay for civilization. If that is the case, New Yorkers might very well be the most civilized people in the world.

For a long time some folks in this town have seen tax increases as the goose that could lay the economic golden egg.

Because federal prosecutors recently charged 18 city tax assessors with taking bribes over the past 35 years in order to cut the property taxes on some 500 buildings, some would say that it is time for property owners, especially corrupt ones, to pay more. Of course those who break the law should be held accountable. But raising any taxes now would send the worst signal to the young family trying to decide where to live, or to the business trying to balance the positives and negatives of staying in New York.

Simply put, this is the worst time to raise taxes. September 11th has already caused the city to lose scores of residents, jobs, and companies willing to do business here.

There is only one proven way to get us out of long-term deficits and that is to grow our way out. Taxes inhibit economic growth and are precisely the opposite approach that we as a municipality should take. This shortsighted and backward plan would be a case of the "cure" being worse than the disease. It seems that history's lessons are lost on some people, despite the fact that the history is quite recent and the lessons quite apparent.

In the 1980s and early 1990s, New York State taxed businesses and the middle class incessantly and we hemorrhaged hundreds of thousands of jobs. As a result, scores of hard working New Yorkers skipped town.

We told our tax base to take a hike, and they did.

  • In 1993, the city tax burden for people doing business or living in New York was 8.8 percent. By 2001 we had reduced that burden by 17 percent to an overall rate of 7.3 percent. Over that exact same period of time, the city gained 481,000 private sector jobs -- an increase of 17 percent.
  • From 1989 to 1992 the city increased taxes by over $1.5 billion. In that same time period, the city lost over 300,000 jobs.
  • A study by the Tax Foundation ranked New York State second highest in the nation in both total tax burden and in state and local tax burden.
  • A report by the Public Policy Institute of New York State found property taxes in New York State to be 58 percent above the national average.

The statistics could not be clearer. If you raise taxes, you lose jobs. If you lose jobs, you lose people willing to stay in New York. If people leave New York our economic problems grow exponentially worse. With New York already at the top of the national list in tax burdens, this is the worst time to raise taxes. Raising taxes would be done at the cost of losing lobs, losing families, and a bigger budgetary hole.

Our biggest concern should be that the lure of raising taxes is like opening a bag of those potato chips -- you can't have just one. Raising taxes becomes an easy fix and there is always a "critical program" that "needs funding." If we open the door today, using our current economic challenges as an excuse, New Yorkers will find that tax increases are a monster that will haunt us again and again.

James Oddo is the City Council Minority Leader, a Republican who represents the 50th Council District

Read "Consider Tax Hikes" by James Wetzler

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