Bush–GOP Tax Cut A Break For N.Y.
Bush–GOP Tax Cut A Break For N.Y.
After getting belted seemingly relentlessly by a steady flow of increases in property levies, income and sales taxes and numerous fees, New Yorkers could easily be excused if they believed every level of government was intent on picking their pockets.
But last week the sun broke through the gloom as Congress, under personal prodding from President George W. Bush, passed a $350 billion tax cut and state aid package that he and Republican lawmakers feel certain will stimulate the nation’s economy and start creating jobs.
It wasn’t as much as Bush had originally asked for, but he welcomed it nonetheless. He applauded Congress for approving it, saying, "These are ‘can do’ people, and I’m real proud of the work they’ve done."
The Gazette heartily agrees with the president. This country cannot afford to stand pat and just keep hoping the economy will somehow start to improve, jobs will be created and the stock market will start to climb again. The economy needs a stimulus and an infusion of money to serve as just that will start very soon as a result of the tax and aid package the president is expected to sign into law in a day or two.
Looked at in another way, it will provide an uplift to New Yorkers’ spirits as well as those of citizens throughout the country.
The $350 billion package breaks down to $320 billion in tax cuts over 10 years; $20 billion in aid to state and local governments over the next two years to assist in meeting Medicaid costs and to ease their fiscal crises, and $10 billion in child credits for low-income persons who do not pay taxes.
What we like about the way the tax reductions and other fiscal aids will be implemented is that they will start very soon and should be very helpful to taxpayers in New York City deluged with the tax increases imposed by the administration of Mayor Michael Bloomberg. Families who received a $600 child tax credit for each child earlier this year, will receive another check in the amount of $400 per child in the mail around the beginning of July, according to Treasury Secretary John Snow. The credit was raised to $1,000 per child under the new tax act.
At about the same time, workers will start to see fatter paychecks as income tax withholding rates are lowered in line with lower tax brackets created under the new law. Included among these will be married people who file joint returns, who will benefit from an increase in the standard deduction they take.
Arguments have been made that the tax plan benefits the rich to a great degree by the reduction in tax rates and lower taxes on dividends and capital gains.
But as we see it, there are millions of taxpayers throughout Queens and the rest of the city who are badly in need of relief from the burdens of new taxes imposed on them.
For New York state as a whole, it is expected state officials will be receiving about $2.2 billion out of the $20 billion in aid going to all the states.
Out of the $2.2 billion, about $700 million will be direct aid to ease the state’s fiscal crisis; the other $1.5 billion will help the state to meet its ever-rising Medicaid obligations. Hopefully, some of these funds will be shared with New York City and other localities.
Overall, the new federal tax reduction plan will provide relief to New York City residents both directly, from the tax cuts, as well as indirectly, by the state aid grants. This is a win–win situation for millions of New Yorkers who have been on the losing end of late.