Impact of Bush tax plan on New York, other states

President Bush’s proposed tax cut plan would cost New York state and New York City a combined $711 million next year, according to an estimate released Jan. 14 by state Comptroller Alan G. Hevesi (D).

For those in the “why should I care about New York?” department: Hevesi observes that “New York is not alone in being injured by the President’s proposal. Forty-one of the fifty states will lose an estimated $4.5 billion in revenues in the first year alone, according to the Center for Budget and Policy Priorities.”

(Yes, I know I already mentioned the Budget and Policy Priorities report, but I think it bears repeating.)

Hevesi points out that this revenue hit would come at a time when states are already facing budget gaps totalling between $60 billion and $85 billion for next year.

“If the president is not going to help state and local governments, he should at least not hurt us,” Hevesi said. “He should structure his dividend tax cut so that states are not injured.”

Thankfully, the administration’s tax cut plan has been criticized by Democrats and Republicans, and seems unlikely to pass as proposed.

If by some chance the plan does pass, however, look for many states to decouple from the federal changes (as a significant number have done in the aftermath of the federal estate tax phase-out).

Meanwhile, I heard on Morning Edition (NPR) that Bush is campaigning today for $200-$250k med-mal award caps.

And of course everyone knows by now that the administration is filing an amicus brief in support of a lawsuit challenging the University of Michigan’s admissions program (the university take race into consideration during the admissions process). Do yourself a favor and read TBogg’s description of the announcement.


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