S152-2013 Actions

• Jan 9, 2013: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S152-2013 Memo

BILL NUMBER:S152

TITLE OF BILL:
An act
to amend
the tax law, in relation to placing a limit upon the personal income tax
by the state of New York

PURPOSE:
This bill imposes a cap on the levy collected by the personal income
tax by New York State. In the event the cap is exceeded, rebate
checks will be mailed to all New York taxpayers. This bill seeks to
prevents any future tax levy increases over a certain allowable
growth factor while making New York's income tax system more
progressive over time.

SUMMARY OF PROVISIONS:
Section 1 establishes a cap on the levy of the personal income tax and
establishes a rebate check program if receipts exceed this levy cap.

JUSTIFICATION:
In New York income taxes account for more revenue than any other type
of tax. At the same time, the income tax is one of the most
burdensome taxes. It takes money directly out of consumers paychecks,
disincentivizing work and reducing consumption.

The average New Yorker pays far too much in income taxes. It is no
accident that New York State has lagged in job creation and been a
leader in out of state migration, while zero income tax states like
Texas and Florida have seen an influx of both businesses and
individuals. This bill seeks to prevent further increases to New York
State's income taxes by capping the total income tax levy at the
2012-13 fiscal year amount plus a growth factor.

Importantly, this growth factor is a value that is historically
smaller than the increase in total income from state taxpayers. This
will result in income taxes consuming less and less as a percentage
of the New York economy every year. With incomes rising faster than
the rate of
inflation, this bill will provide the impetus for government to reduce
tax rates every year in order to stay under the cap.

If, however, no agreement to reduce tax rates are made during a given
year, this bill automatically makes the income tax code more
progressive by providing a rebate to each taxpayer of an equal
amount, up to the amount they paid in taxes, for the total amount of
income tax revenue in excess of the cap. If a taxpayer making $40,000
receives a $500 tax rebate, a taxpayer making $40,000,000 would
receive the same $500 tax rebate. In the absence of other reform,
this bill does not create a tax cut for just the wealthy or just the
middle class, but instead an equal tax rebate for all taxpayers.

This bill will send the signal that New York is committed to
controlling the growth of its income tax and will not use reform of
the tax code to disguise a net tax increase. Small businesses, many
of which are subject to the income tax, need certainty to make


intelligent investments in personnel and equipment. This bill will
give them confidence that New York will not change the economic rules
on small businesses year to year.

This bill will also ensure that all New Yorkers will share in the
prosperity as incomes grow. As the number of individuals making high
incomes increases, all taxpayers will see their yearly rebate checks
grow.

LEGISLATIVE HISTORY:
2011-12:  S.6122 Referred to Investigations & Government Operations

EFFECTIVE DATE:
This act shall take effect immediately.

S152-2013 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                          152
 2013-2014 Regular Sessions
 I N  SENATE
 (PREFILED)
 January 9, 2013
 
 Introduced  by Sen. GALLIVAN -- read twice and ordered printed, and when
 printed to be committed to the Committee on Investigations and Govern
 ment Operations
 

AN ACT to amend the tax law, in relation to placing  a  limit  upon  the
 personal income tax by the state of New York
 

THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section 1.  The tax law is amended by adding a new section 608 to read
 as follows:

 

S 608. LIMIT UPON THE PERSONAL INCOME TAX LEVY BY  THE  STATE  OF  NEW
 YORK.
 1.  UNLESS  OTHERWISE  PROVIDED  BY LAW, THE AMOUNT OF PERSONAL INCOME
 TAXES THAT MAY BE LEVIED BY OR ON BEHALF OF THE STATE OF NEW YORK  SHALL
 NOT EXCEED THE TAX LEVY LIMIT ESTABLISHED PURSUANT TO THIS SECTION.
 2. WHEN USED IN THIS SECTION:

 (A)  "ALLOWABLE  LEVY  GROWTH  FACTOR" FOR ALL FISCAL YEARS THAT BEGIN
 AFTER TWO THOUSAND THIRTEEN SHALL BE THE HIGHER  OF:  (I)  ONE  AND  TWO
 ONE-HUNDREDTHS;  OR  (II) THE SUM OF NINETY-NINE ONE-HUNDREDTHS PLUS THE
 INFLATION FACTOR.
 (B) "AVAILABLE CARRYOVER" MEANS THE AMOUNT BY WHICH THE TAX  LEVY  FOR
 THE PRIOR FISCAL YEAR WAS BELOW THE TAX LEVY LIMIT FOR SUCH FISCAL YEAR,
 IF  ANY, BUT NO MORE THAN AN AMOUNT THAT EQUALS ONE AND ONE-HALF PERCENT
 OF THE TAX LEVY LIMIT FOR SUCH FISCAL YEAR.
 (C) "COMING FISCAL YEAR" MEANS THE FISCAL YEAR OF THE STATE GOVERNMENT
 FOR WHICH A TAX LEVY LIMIT SHALL BE DETERMINED PURSUANT TO THIS SECTION.
 (D) "INFLATION FACTOR" MEANS THE QUOTIENT OF: (I) THE AVERAGE  OF  THE
 NATIONAL  CONSUMER PRICE INDEXES DETERMINED BY THE UNITED STATES DEPART
 MENT OF LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO THE
 START OF THE COMING FISCAL  YEAR  MINUS  THE  AVERAGE  OF  THE  NATIONAL
 CONSUMER  PRICE  INDEXES  DETERMINED  BY THE UNITED STATES DEPARTMENT OF
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD01978-01-3
 
       S. 152                              2
 LABOR FOR THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO  THE  START
 OF  THE  PRIOR FISCAL YEAR, DIVIDED BY: (II) THE AVERAGE OF THE NATIONAL
 CONSUMER PRICE INDEXES DETERMINED BY THE  UNITED  STATES  DEPARTMENT  OF
 LABOR  FOR  THE TWELVE-MONTH PERIOD ENDING SIX MONTHS PRIOR TO THE START
 OF THE PRIOR FISCAL YEAR, WITH THE RESULT EXPRESSED AS A DECIMAL TO FOUR
 PLACES.
 (E) "PRIOR FISCAL YEAR" MEANS THE FISCAL YEAR OF THE STATE IMMEDIATELY
 PRECEDING THE COMING FISCAL YEAR.
 (F) "TAX LEVY LIMIT" MEANS THE AMOUNT OF TAXES AUTHORIZED TO BE LEVIED
 BY OR ON BEHALF OF THE STATE PURSUANT TO THIS SECTION FOR  FISCAL  YEARS
 BEGINNING AFTER TWO THOUSAND THIRTEEN.
 (G)  "TAX"  OR  "TAXES"  MEANS  PERSONAL  INCOME TAXES LEVIED BY OR ON
 BEHALF OF THE STATE.
 3. (A) SUBJECT TO THE PROVISIONS OF SUBDIVISION FIVE OF THIS  SECTION,
 BEGINNING  WITH THE FISCAL YEAR THAT BEGINS AFTER TWO THOUSAND THIRTEEN,
 THE STATE SHALL NOT ADOPT A BUDGET THAT REQUIRES  A  TAX  LEVY  THAT  IS
 GREATER THAN THE TAX LEVY LIMIT FOR THE COMING FISCAL YEAR.
 (B)  THE  STATE  SHALL  CALCULATE THE TAX LEVY LIMIT APPLICABLE TO THE
 COMING FISCAL YEAR WHICH SHALL BE DETERMINED AS FOLLOWS:

 (I) ASCERTAIN THE TOTAL AMOUNT OF TAXES LEVIED FOR  THE  PRIOR  FISCAL
 YEAR.
 (II) MULTIPLY THE RESULT BY THE ALLOWABLE LEVY GROWTH FACTOR.
 (III) ADD THE AVAILABLE CARRYOVER, IF ANY.
 4.  IN  THE  EVENT THE STATE'S ACTUAL TAX LEVY FOR A GIVEN FISCAL YEAR
 EXCEEDS THE TAX LEVY LIMIT BY MORE THAN ONE  PERCENT  OF  THE  TAX  LEVY
 LIMIT,  THE STATE SHALL REBATE THE TOTAL AMOUNT THAT THE ACTUAL TAX LEVY
 EXCEEDS THE TAX LEVY LIMIT SO THAT  EACH  INDIVIDUAL  FILER  RECEIVES  A
 REBATE  OF  EQUAL AMOUNT ROUNDED DOWN TO THE NEAREST CENT, PROVIDED THAT
 NO INDIVIDUAL SHALL RECEIVE A REBATE OF A GREATER AMOUNT THAN THE INCOME
 TAXES PAID DURING THE SAME FISCAL YEAR.  THESE REBATES SHALL  BE  MAILED
 IN THE FORM OF CHECKS PAYABLE TO THE FILING INDIVIDUAL NO LATER THAN THE
 FIRST OF SEPTEMBER FOLLOWING THE END OF EACH FISCAL YEAR.
 5.  IN  THE  EVENT THE STATE'S ACTUAL TAX LEVY FOR A GIVEN FISCAL YEAR
 EXCEEDS THE TAX LEVY LIMIT AS ESTABLISHED PURSUANT TO  THIS  SECTION  BY
 LESS  THAN  ONE PERCENT OF THE TAX LEVY LIMIT, THE STATE SHALL PLACE THE
 EXCESS AMOUNT OF THE LEVY IN RESERVE IN ACCORDANCE  WITH  SUCH  REQUIRE
 MENTS  AS  THE STATE COMPTROLLER MAY PRESCRIBE, AND SHALL USE SUCH FUNDS
 AND ANY INTEREST EARNED THEREON TO OFFSET THE TAX LEVY FOR  THE  ENSUING
 FISCAL YEAR.
 

S 2. This act shall take effect immediately.

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