Yesterday, the Tax Foundation praised the recently enacted tax reform in New York. The lowering of the corporate tax rate has rapidly moved the state up the charts. So mission accomplished right? New York is now competitive and “open for business”!
Not so fast.
Also released yesterday was the American Legislative Exchange Council (ALEC) annual “Rich States, Poor States” business climate analysis. Guess where New York ranks…dead last. Now to be fair, this analysis is looking at 2013 and does not take into account the recently enacted tax reforms. But as we stated repeatedly, a corporate only approach to tax reform was going to leave many small businesses clinging to an unaffordable status quo.
The tax cuts that the Governor and lawmakers enacted this year are pretty narrowly tailored for manufacturers and corporations, and while NFIB/NY supported the plan, this report from ALEC should be a reminder to Albany that we’ve got a long way to go before we’re really competitive.
Frankly, until our leaders in Albany recognize that punishing income means punishing work, we’re going to remain at the bottom. Small businesses mostly pay the income tax, not the corporate tax, and on that side of the ledger we haven’t moved the needle.
A real economic program would seek to reduce taxes for everyone instead of picking winners and losers. Unfortunately for small business, Albany hasn’t positively impacted them much at all recently.