Suitably Flip

NYC Councilman Proposes the Unthinkable

Another banning?  Stricter anti-business regulation?  *Sigh*  If only.  I'm afraid it's even unthinkabler.

Courageous (if lonely) GOP Councilman James Oddo (one of two Republicans, among 51 Councilmembers) wants to look into lowering New York City's personal income tax.  He's quick to point out that he's not actually advocating a specific tax cut per se, but rather the initiation of a discussion about the impacts of any hypothetical cut.

Still, that's about as close to fiscal blasphemy as you get around these parts.  And I like it.  Blaspheme away, Councilman Oddo:

"There is no downside to having a discussion," he said yesterday. "We can have real facts to deal with and make an educated decision from there."

His floated his proposal a week after the Independent Budget Office issued a report showing taxes in New York City are nearly 50% higher than the eight other largest American cities. Mr. Oddo said he is focusing on personal income tax reductions because if people had more dollars to spend it would spur economic activity.

"What we lose in revenue initially, you gain in job increases and allowing the economy to reach its potential," he said yesterday. He will discuss his proposal at today's council meeting.

Seems pretty simple, right?  Pro-growth fiscal policy stimulates activity, creates wealth, creates jobs, increases real wages, increases the tax base, improves standards of living and enhances long-term sustainable prosperity.

While pledging to pay public lip service to Oddo's idea, Council Speaker Christine Quinn quite sublimely misses the point.

A spokeswoman for Speaker Christine Quinn, Maria Alvarado, said via e-mail that the council has championed tax relief for property owners, renters, and small-business owners over the past year in an effort to make New York more affordable.

"We will give a full and thoughtful review of Council Member Oddo's proposal," she wrote.

Lowering taxes is good policy and its immediate effects can include making a city more affordable to its inhabitants, but that's not the primary impetus.  Longer-term, to stay competitive, to spur economic activity, and to raise the standards of living of all New Yorkers, we need to move away from punishing wealth creation.  To get there, philosophically, we first need to get away from two ideas:  1) that a reduction in taxes is tantamount to taking money away from government and thus from its rightful stewards and 2) that the relevant assessment of the budgetary impact of a tax cut is the impact on next year's revenue forecast.

The flaws with #1 are too self-evident and numerous to warrant detailing, but disagreement over this basic philosophical point sadly tends to fall quite squarely along party lines (meaning a city like New York, with a 96% Democratic majority in the City Council, is bound to be require some persuasion).  As for #2, all it takes to see the pro-growth light is a basic understanding that changes in tax policy influence behavior and a willingness to adopt a financial perspective that looks beyond the next election cycle.  I've come begrudgingly to accept the fact that for most elected officials, there's simply no such thing as a world beyond the next election cycle.  For these reasons, the unthinkable has thus far remained unfeasible.

But for once, the political calendar might be fleetingly on the side of sound policy.  For NYC Councilmembers, the horizon beyond which the future goes opaque is currently November 2009, which may be a long enough stretch to see meaningful local tax reform take root and begin to catalyze growth.  (The 2003 federal investment income tax cuts kicked in with serious gusto within just a few quarters.)  If Councilman Oddo's initiative is well-executed and if he can get his colleagues to think critically and rationally about this vital issue, given that their jobs are all secure for a few years, the unthinkable might just become thinkable for one flitting moment.

That is, assuming the Council doesn't banish him from the city.

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NYC Councilman Proposes the Unthinkable

Another banning?  Stricter anti-business regulation?  *Sigh*  If only.  I'm afraid it's even unthinkabler.

Courageous (if lonely) GOP Councilman James Oddo (one of two Republicans, among 51 Councilmembers) wants to look into lowering New York City's personal income tax.  He's quick to point out that he's not actually advocating a specific tax cut per se, but rather the initiation of a discussion about the impacts of any hypothetical cut.

Still, that's about as close to fiscal blasphemy as you get around these parts.  And I like it.  Blaspheme away, Councilman Oddo:

"There is no downside to having a discussion," he said yesterday. "We can have real facts to deal with and make an educated decision from there."

His floated his proposal a week after the Independent Budget Office issued a report showing taxes in New York City are nearly 50% higher than the eight other largest American cities. Mr. Oddo said he is focusing on personal income tax reductions because if people had more dollars to spend it would spur economic activity.

"What we lose in revenue initially, you gain in job increases and allowing the economy to reach its potential," he said yesterday. He will discuss his proposal at today's council meeting.

Seems pretty simple, right?  Pro-growth fiscal policy stimulates activity, creates wealth, creates jobs, increases real wages, increases the tax base, improves standards of living and enhances long-term sustainable prosperity.

While pledging to pay public lip service to Oddo's idea, Council Speaker Christine Quinn quite sublimely misses the point.

A spokeswoman for Speaker Christine Quinn, Maria Alvarado, said via e-mail that the council has championed tax relief for property owners, renters, and small-business owners over the past year in an effort to make New York more affordable.

"We will give a full and thoughtful review of Council Member Oddo's proposal," she wrote.

Lowering taxes is good policy and its immediate effects can include making a city more affordable to its inhabitants, but that's not the primary impetus.  Longer-term, to stay competitive, to spur economic activity, and to raise the standards of living of all New Yorkers, we need to move away from punishing wealth creation.  To get there, philosophically, we first need to get away from two ideas:  1) that a reduction in taxes is tantamount to taking money away from government and thus from its rightful stewards and 2) that the relevant assessment of the budgetary impact of a tax cut is the impact on next year's revenue forecast.

The flaws with #1 are too self-evident and numerous to warrant detailing, but disagreement over this basic philosophical point sadly tends to fall quite squarely along party lines (meaning a city like New York, with a 96% Democratic majority in the City Council, is bound to be require some persuasion).  As for #2, all it takes to see the pro-growth light is a basic understanding that changes in tax policy influence behavior and a willingness to adopt a financial perspective that looks beyond the next election cycle.  I've come begrudgingly to accept the fact that for most elected officials, there's simply no such thing as a world beyond the next election cycle.  For these reasons, the unthinkable has thus far remained unfeasible.

But for once, the political calendar might be fleetingly on the side of sound policy.  For NYC Councilmembers, the horizon beyond which the future goes opaque is currently November 2009, which may be a long enough stretch to see meaningful local tax reform take root and begin to catalyze growth.  (The 2003 federal investment income tax cuts kicked in with serious gusto within just a few quarters.)  If Councilman Oddo's initiative is well-executed and if he can get his colleagues to think critically and rationally about this vital issue, given that their jobs are all secure for a few years, the unthinkable might just become thinkable for one flitting moment.

That is, assuming the Council doesn't banish him from the city.