January 27, 2011

Welcome to Upside Down, the Center for Working Families’ weekly economic update.

We begin with a simple question: What should New York do with $4.6 billion a year?

Repair roads and bridges? Contribute to school aid? Slash the state deficit? Or give tax breaks to the wealthiest?

Without action from Albany, our state’s income tax surcharge on top earners — a modest 1 to 2 percent on incomes over $200,000 — will expire on December 31. That will transfer $4.6 billion a year from crucial public investments to the pockets of the richest.

The debate is simmering; now’s the time to master the basics of this crucial issue.  Check out our short brief and its accompanying presentation, “Breaking the Bank: Why a $4.6 Billion Tax Break for the Wealthiest New Yorkers is a Bad Deal for the Empire State.”

These materials kick off our multi-part series, ABCs of the New York Economy.  Each weekly installment of Upside Down will link to a brief explaining the ABCs of one aspect of New York’s jobs and revenue crisis. We’ll also provide quick commentary on the latest economic news (see below). We hope you find it useful!

Sunshine Ludder & Chloe Tribich
Senior Policy Organizers

News Alerts

Denial: a river in New York?

With the spotlight on state fiscal crises, you’d think revenue generation would rise to the top of everyone’s agenda.  But here in the Empire State, our Governor wants to secure tax breaks for the wealthy – a surefire way to increase the deficit and decimate public structures like schools, health care and mass transit.

Here’s what he should focus on: righting our upside down tax structure. Even with the high-end income surcharge, the wealthiest shoulder a smaller burden in state and local taxes than families earning between $33,000 and $56,000.

Does Lloyd Blankfein need a tax break?

Last week’s New York Times study shows that Goldman Sachs’ inner circle benefited handsomely from stock options granted during the financial collapse of 2008. As of August 2010, CEO Lloyd Blankfein and his family owned Goldman shares worth about $355 million.

If Blankfein paid state income taxes on all $1.1 million of his compensation, he would gain $23,320 a year if the high-end surcharge expires. That’s 3,560 Citymeals-on-Wheels and other services for impoverished elderly. Or a Baccarat chandelier for Blankfein’s Central Park West penthouse.

Luxury realtor: 2010 was a great year for me

Lloyd Blankfein is not alone. According to Michele Kleier, co-president of upscale brokerage firm Gumley Haft Kleier, New York’s upper crust is living large – though they don’t want the spotlight on their big bucks.

“Bonuses seem to be good,” she commented in a New York Times interview. “We have a lot of Wall Street clients — I would say that probably about 75 percent of my clients personally are from Wall Street. They want to quietly buy. I never signed so many confidentiality agreements in my life as I have in the last two years.”

Next on Kleier’s list? The 16th floor of 995 Fifth Ave, on the market for $27.5 million.

Most of us still have plenty to worry about.

According to the Bureau of Labor statistics, in December 2010, New York experienced the largest job losses in the US: nonfarm payroll employment decreased by 22,800.

Workers in counties like the Bronx and St. Lawrence – which suffer from official unemployment rates of about 13 and 9 percent respectively – will be in even worse shape if Albany leaders cut education and job training to finance tax breaks for the wealthy.

Some New Yorkers are taking action.

Members of Community Voices Heard and VOCAL crashed the Real Estate Board of New York’s annual gala at the Hilton, demanding that the organization step down from the Committee to Save New York. “REBNY and CSNY want tax breaks for the super-rich and service cuts for everyone else,” the flyer declared.