Reporter Volume 26, No.21 March 23, 1995

By STEVE COX
Reporter Staff
Only the wealthiest New Yorkers can afford Gov. Pataki's proposed tax
cuts, the executive director of an Albany-based think tank explained
to UUP members at UB recently. Frank Mauro, executive director of the
Fiscal Policy Institute, spoke at a UUP dinner in Pistachio's on March
9.
	The Fiscal Policy Institute, created by several public
interest groups and unions, including UUP, is promoting several
alternate tax cut plans that they claim offer "real tax relief" to
middle-class taxpayers, in part by raising tax rates on the highest
income earners in New York and closing several loopholes in business
taxes that Mauro calls "corporate welfare," including accelerated
depreciation and the investment tax credit.
	In a recent report, Mauro's organization claimed that Pataki's
budget and tax cut plan would exacerbate an already huge differential
between the wealthiest and poorest New Yorkers. "Only Louisiana has a
larger gap between the average incomes of the wealthiest and poorest
fifths of its population," said Mauro.
	Citing a Port Authority study that indicated a high
correlation between educational attainment and income, Mauro
specifically blasted Pataki's proposed cuts to education and higher
education. "Only Rhode Island and Pennsylvania have more people
without high school degrees, but only three states have more people
with post-graduate or professional degrees," he explained. "The
disappearing middle class is losing the opportunity to attain even a
basic college degree."
	Mauro, a political economist, explained that taxation
generally takes one of three varieties: progressive, proportional and
regressive. "A progressive tax structure slightly increases the
percentage of personal income paid in taxes as income grows.
Proportional, or flat taxes, keep the percentage the same among all
taxpayers. Regressive plans actually take a higher percentage of
personal income in taxes from lower income than higher income
taxpayers," he said.
	"People advocate progressive or even proportional tax plans.
Regressive taxation is something no one would defend. No government
sets out to create that, yet that is what we have in New York," said
Mauro, noting that the lowest fifth of New York taxpayers spend over
15 percent of their personal income on state and local taxes, while
the middle fifth spends 14 percent and the top fifth spends just over
10 percent.
	Though slashing millions of dollars in social spending,
Pataki's tax cut will save most low income New Yorkers just $1 a week,
and middle income earners less than $3 a week. And, it would continue
to shift tax burdens to the local level, he pointed out Between 1986
and 1993, the FPI study concludes, personal income grew only 32.2
percent while the economy grew 45.7 percent. However, property taxes
grew 58.3 percent during the same period. In fact, implementing the
long-delayed final leg of a 1987 tax cut plan, which Pataki has
included in his plan, would actually cost many New Yorkers more money,
Mauro said.
	Married taxpayers with two children and average itemized
deductions for their income level, and with an adjusted gross income
of $42,880 would actually pay $58 more in taxes as result of this "tax
cut," Mauro said. Savings would not be realized until adjusted gross
incomes reached $85,000. However, families with adjusted gross incomes
of $850,000 would save $2,250 a year.
	Mauro has extensive experience in New York politics. Under
former state Assembly Speaker Stanley Fink, he served as director of
the Program Development Group and secretary of the powerful Ways &
Means Committee. In 1986, he left the Assembly to become deputy
director of the Rockefeller Institute at SUNY Albany. Mauro also
chaired the New York City Charter Revision Commission that overhauled
the structure of New York City government three years ago, eliminating
the Board of Estimate and Apportionment and returning more powers to
the city council.
	Mauro explained that, under Governors Carey and Cuomo, New
York had already implemented big tax cuts. "No other state has ever
reduced personal tax rates in such a dramatic manner," Mauro said.
From a high in the late '60s of 15 percent, New York's top tax rate
has fallen to 7.8 percent currently. Pataki's four year plan would
draw that down to 5.9
percent, he said.