Albany Times Union

There’s a better way to fund the MTA: Tax the rich

- By Sarahana Shrestha

Gov. Kathy Hochul’s proposal to increase the Payroll Mobility Tax (PMT) to partially fund the MTA illustrate­s how an austerity budget can exacerbate tensions between different parts of our state. Hudson Valley municipali­ties with limited resources, such as Red Hook and Rhinebeck

Assemblyme­mber Sarahana Shrestha of Esopus represents the 103rd Assembly District.

in my district, would have difficulty funding a transit system that does not serve them. But working-class commuters downstate, who depend on public transit and help to create much of the state’s wealth, should not have to face fare hikes in the midst of an affordabil­ity crisis, either.

The underlying issue with the proposal, which has been rejected from both houses, isn’t which counties should be exempt from the tax — it’s that it lacks a vision on how to truly invest in our public goods, including the country’s largest transit system.

New York is the wealthiest and most unequal state in the country, where the rich make billions through investment­s and large inheritanc­es without lifting a finger and large corporatio­ns make millions in profits without paying what they owe in taxes. Instead of depending on a payroll tax that passes costs to workers, we should tax our wealthiest to create consistent sources of large funds. Besides, it just so happens that most of the wealthiest live in New York City.

New York’s PMT was first enacted in 2009. It applies to nonexempt employers who spend more than $312,500 in payroll per quarter and are based in counties where MTA service exists, however scant, including Dutchess County. This year‘s executive budget proposes raising an additional $800 million per year by increasing the tax rate from 0.34 percent to 0.50 percent for employers with more than $437,500 in payroll expenses per quarter.

Since the tax is applied to the employer’s payroll expense, increasing the rate would incentiviz­e the employer to reduce the number of employees and lower their wages, which goes against our need to create new jobs.

Since 2020, when taxes on the rich were last raised here, the number of New Yorkers who earned an annual income of $1 million or more increased from 69,688 to 84,366 — a 21 percent jump. We can’t afford to continue fighting over crumbs when we should be circulatin­g our collective wealth to fund public goods that benefit us all.

The Corporate Tax bill (S.1980/ A.3690), which I’m carrying in the Assembly with Rep. Anna Kelles, would raise $7 billion annually. The proposal the Assembly has included in its onehouse bill will raise $865 million in the first year and $1.964 billion in the second. Because New York applies corporate tax rates to profits, the affected corporatio­ns would remain profitable and have no incentive to stop doing business in New York. Tesla isn’t going to stop selling cars to New Yorkers just to save money in taxes. In fact, when the state enacted a higher corporate tax rate in 2021, the revenues collected exceeded initial expectatio­ns by $750

million, bringing in a total of $3.4 billion over three years.

Another proposal, the Capital Gains Tax bill (S.2162/A.2576), would raise $12.5 billion by adding a surtax on the investment income of the top 1.3 percent of tax filers. The rich make their money from investment­s, not wages, and 71 percent of New Yorkers support taxing these investment incomes accordingl­y.

As legislator­s elected to lead New York, we cannot fall into the trap of pitting downstate working-class New Yorkers against upstate working-class New Yorkers. That division only serves the interests of the rich and the powerful. We need to strengthen the quality of life for all New Yorkers.

However, funding is only part of the solution. The “Fix the MTA” package of bills protects New Yorkers who depend on public transit, and it brings fiscal responsibi­lity, democracy and accountabi­lity to the MTA. We must get our mass transit funding model right, because we must also invest in public transit throughout the state, including in areas unserved or underserve­d by the MTA. The Payroll Mobility Tax can’t get us there, but taxing the wealthy can.

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