News, commentary and analysis by leaders of the Communist Party USA in New York State. We discuss State politics and issues in New York City, covering developments in labor, civil rights education, housing and more.

Friday, March 6, 2009

Tax the rich -- A fair budget for New York!

Below are some suggestions from the NYS Communist Party on how to fix the NYC and state budgets, in a way that is not harmful, but actually beneficial to working people, the vast majority of New Yorkers. This was distributed in pamphlet form at the March 5 Rally for New York, a hugely successful project of the labor movement and the community.

The Economic Crisis:
Who's to Blame and How Can we Solve It?
Issued by the NY State Communist Party, CPUSA

We now know that our city and state are getting $24.4 billion from the stimulus package.

Now that we’re getting more stimulus package money than the combined deficits, one would think Bloomberg and Paterson would use it to fill the holes. Instead, both are arguing that the infusion of Federal money will not cover two full years and that there will be greater deficits down the road. Both say the basic problem is the city and state are overspending and need to cut back substantially for years to come.

Working people should expect and insist that all levels of government – federal, state and city help bring the economic crisis to an end and help close the on-going gap in income between the wealthy and big corporations and all working people and especially the poor, who are disproportionately African American, Afro-Caribbean, Latinos and Asians.

In hard times can this be accomplished? Is it true that working people and the poor must sacrifice more to get us out of the economic mess that Wall Street set off?

People like Bloomberg are against taxing the rich and are for new cuts in worker pay and benefits, for layoffs and cuts in vital services like education and health care. But that is a policy that will make it harder to get out of the economic crisis while inflicting even more pain on working people.

When working people lose their jobs or otherwise have less income, their spending declines and small businesses from which they buy suffer and the big manufacturers and distributors of what they buy cut back and lay off still more people in a spiral downward.

We don’t have to describe the crisis and its affects—people already know. In the words of President Obama:

You don't need to hear another list of statistics to know that our economy is in crisis, because you live it every day. It's the worry you wake up with and the source of sleepless nights. It's the job you thought you'd retire from but now have lost; the business you built your dreams upon that's now hanging by a thread; the college acceptance letter your child had to put back in the envelope. The impact of this recession is real, and it is everywhere.

Who and What Is Responsible?
Working people aren’t the problem. We want jobs, and we want to have money to spend on the things we need for a decent life. And there is plenty of work that needs to be done: to restore our roads, bridges, water, sewer, electrical, gas and other systems, for school construction, for updating and greening buildings, for transit system updating, repair, extension, etc. We need decent health care for all.

Responsibility for the crisis lies with greed of the Wall Street financiers who still insist on huge annual income, and their political enablers in Washington, DC and elsewhere. But they are only doing what the capitalist system propels them to do: To be greedy, to seek maximum profit at the expense of the rest of us.

The Obama Administration represents the victory of a vast coalition of labor, the racially and nationally oppressed, women youth and many others over the most reactionary section of finance capital. But as we see in Congress, the Republicans still try to block all progress. At the same time the Obama Administration tries to press forward to begin to challenge wider sections of big business, not always in a fully consistent way, but still on a forward-moving path.

Working People Need Help from the City and State, Not More Pain
What do working people need now to make it through the economic crisis for themselves and their families? Help from the Federal Government! Help from the State Government! Help from the City Government! With President Obama’s urging and pushing the Congress, the stimulus package was passed. It provides some $24.4 billion to New York City and State and the MTA.

So what do Mayor Bloomberg and Governor Paterson propose to do with their 2010 city budget (which begins July 1) and the 2009 state budget that begins April 1? You might expect the city and state to make up the difference, certainly not to add to the problems. But that is exactly what Bloomberg and Patterson are trying to do. Since they learned how large the help will be for our city and state, Bloomberg and Patterson claim huge cuts in health care, education and other necessities are still required.

Bloomberg and Patterson argue we spend too much and only cuts in spending can fix the problem. Before the start of the economic crisis, the percentage of people in our city living at or below the poverty line was 25 percent. 2 million people in the city were entitled to food stamps but only 1.3 million received them. Were we spending too much on poor people, or not enough to bring them up to a decent living standard?

Bloomberg has already cut spending and increased regressive taxes in the current budget year by several billion dollars. Starting in July, Bloomberg foresees a further budget gap of $4-5 billion which he proposes to fill with givebacks by workers on pensions and health care—especially new hires—and a big increase in sales taxes. He wants city employees to take a pay cut by having new hires pay for a significant part of their health benefits and pensions.

Governor Patterson has already won a couple billions in cuts in the budget for the current year, including increases in tuition at all SUNY schools. For the April 1 fiscal year, the deficit to be made up is $14 billion. He proposes that be done by imposing $4 billion in regressive sales taxes and fees that working people, not the rich or big corporations, would have to pay. $6 billion would be cut from spending on health care and education and some amounts from elsewhere: speed-up for a shrinking state work force and poorer services for working people.

The MTA says its income is not enough to continue as is and has proposed a big increase in fares, reduction, and cut in services, such as bus and subway lines and their frequency of running. All this means layoffs or otherwise shrinking the work force. It also does not have the capital to complete planned improvements and expansions such as the Fulton Street station, the 2nd Ave. subway line and the extension of the #7 train across Manhattan to 11th Ave. The Ravitch Commission Plan is supposed to be the alternative to these draconian measures. It provides for hefty new tolls on bridges and tunnels within the city. This would mean again a regressive tax almost entirely on working people, along with a smaller 8 percent fare increase. We agree that corporations should be taxed, but the Ravitch Plan’s proposal for payroll taxes would also include small businesses, self-employed people and others. These are regressive taxes that we shouldn’t support.

Pitting Us Against Each Other
The Mayor, the Governor and the MTA are asking impossible questions: Which way do you want us to reduce vital services? Or would you rather your coworkers be laid off? Or fare increases? Or higher sales taxes? How do you want to slit your own throat, or your neighbor’s?

But we’re not responsible for the crisis. It was the leaders of Wall Street and the top Bush government figures and some in Congress who let the bankers run wild making money. And the capitalist system as a whole is responsible. These people control it.

In fact, there is no need to have to pick among these bad alternatives. There is money available. Take your pick of how to solve the budget problems without hurting working people:

Sources of Funds to Meet Deficits for the City, MTA & State
Tax increases on those who can afford it
• Restoring a graduated tax to people earning over $250,000 $6 billion
(on $300,000 adds $71 weekly; on $2 million adds $55,516 a year)
• 1% surtax on people with incomes over $1 billion (60 within city) $1 billion
• 1% stock transfer tax on those with net assets of $500,000 $1 billion
• Graduated increase of City income tax on wealthy (Quinn proposal) $1 billion

Cuts in spending that benefit only the wealthy & big corporations
• End of subsidy for industrial development zones $4 billion
• Reduction of governmental units in NYS from present 10,000 $4 billion
• End subsidies and tax breaks to developers of athletic stadiums and housing
for those above the community medium income - both state and city $3 billion
• Elimination of city tax abatements except for religious and educational $1 billion
institutions and recovery of abatements given over the past 10 years to
big corporations and real estate developments
• Abatement repayment $8 billion
• Repayment by big banks of tax abatements for jobs to be retained
but never substantiated $550 million
• Repayment of Republican legislators abnormal perks $120 million

Finally, a crucial need of working people to protect their interests especially in this crisis is passage of the Employees Free Choice Act. 56 percent of workers say if they could they would want a union to protect their wages and interests. But only about 13% are now unionized because the cards are stacked against them. EFCA would make joining a union much easier: all that would be necessary to form a union would be for a majority of workers at any shop to sign recognition cards – EFCA needs to be passed so workers have protection during an economic crisis and as a result can maintain their buying power which the whole economy needs. President Obama supports it and believes unions “are part of the solution.”

What can be done to prevent the present situation developing again and again? Restoring strong, tight regulation and transparency over the financial institutions and outlawing derivatives, credit default swaps, hedge funds and all the complicated, exotic financial products and institutions that are highly risky and hidden. This will help slow a rapid repeat of the present situation. But it is not enough in the longer run. Democratic public ownership of financial institutions, in whole or part, with the ability of the people to prevent a repeat of the present practices will help even more. But in the long run, even that will not be enough. So long as there are huge corporations owning and controlling the use of huge amounts of capital for the purpose of maximizing their private profit, there will be economic crises and great disparities of wealth and many other social ills. Only the social ownership of these institutions and broad democratic planning for the welfare of the people can change that. And that will require a government run by the working class, the racially and nationally oppressed and all working people. That is U.S. socialism.

Winning the Fight
There have been tens of thousands at demonstrations at Wall Street, in Albany and elsewhere. Unions and various issue coalitions have been very active 1199 SEIU has done all of the above and is running TV ads. It has put out a mailer to hundreds of thousands of homes. The UFT and its allies have been campaigning against education cuts; TWU 100 has been campaigning around transit issues. The MTA hearings in each borough were packed with angry opponents for hours. The Working Families Party and many others are campaigning for the increase of taxes on those earning $250,000 and up. The movement needs to get even bigger and more united. We all need to stand together and reject all the cuts/regressive taxes.

There are many unions and community organizations here. If you’re a union member, work in your union’s campaign! Everyone can work with these community organizations for Fair Share Taxing!

Encourage your friends, relatives, neighbors, unions, community organizations, and religious organizations you are related to, to express themselves to the Mayor, the Governor, legislators and city council members!

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