Newspaper article The Christian Science Monitor

New York to Raise Taxes on the Rich. Is It a Blueprint for Congress?

Newspaper article The Christian Science Monitor

New York to Raise Taxes on the Rich. Is It a Blueprint for Congress?

Article excerpt

Bipartisan leaders in New York State agreed to a plan to raise taxes on the rich. The plan is broadly similar to similar ideas discussed - but rejected - by Congress.

In the state that's home to Wall Street, taxes on the rich are about to go up.

That's the hot-button headline from a budget deal announced Tuesday by bipartisan leaders in New York State.

The plan can be viewed in some ways as a microcosm of the larger debate in Washington over national finances. In both cases, a Democratic chief executive and a divided legislature face difficult budget deficits, a still-weak economy, and a public that doesn't want to see taxes go up.

A difference: New York politicians found a path of bipartisan compromise, including plans to collect some new tax revenue - from the state's highest earners - as well as to cut spending. In Washington, efforts to reach such an accord have failed so far.

"Our state government has come together in a bipartisan manner to create jobs, grow our economy and, at the same time enact a fair tax plan that cuts taxes for the middle class," Gov. Andrew Cuomo (D) said in a statement announcing the budget deal. "This would be lowest tax rate for middle class families in 58 years."

Of course, politicians are prone to spin their achievements in the most positive light, and it remains to be seen whether a deal designed to raise $2 billion in new tax revenue will simultaneously mend the budget and invigorate economic activity in New York.

The plan also still needs approval from the full state Senate and Assembly.

But New York State is following a script that many finance experts urge for the nation as well: streamline spending, reduce tax rates, and close loopholes so that more tax revenue can come in. Those elements are hallmarks, for example, of the bipartisan Bowles- Simpson deficit reduction commission that made recommendations to President Obama last year.

New York State's Senate leader, a Republican, echoed Governor Cuomo's praise for the approach. …

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