By Mike Durant
As Gov. Andrew M. Cuomo has been traveling the state touting his “Opportunity Agenda,” perhaps you’ve heard him mention the importance of small business to New York’s economic present and future. According to the rhetoric, small employers are so important to the governor that he is proposing to cut their taxes to their “lowest levels since 1917,” thus ensuring that the Empire State will be truly “open for business.”
Unfortunately for the governor and his rhetoric, mathematics provides undeniable truths that cut through the double-speak and self-congratulation.
While it may be true that the proposed tax cut will reduce the corporate tax rate to 2.5 percent from 6.5 percent by 2018 and result in $32 million in savings, only 40,000 out of more than half a million small businesses would qualify. Why? Because the overwhelming majority of small employers pay their business taxes through the personal income tax and therefore will not be eligible for even the slightest of savings.
Expanding the tax cut to include the vast majority of small employers would ensure their ability to continue to do business in the Empire State, but when asked, administration officials claim they cannot afford it.
Strange, when you consider the following: Hollywood gets more than $400 million in tax credits to produce movies and television shows. This administration spends more than $320 million in tax breaks to attract businesses to move to New York through the gimmicky Start-Up NY program. Even more staggering is that New York spends nearly $2 billion in targeted tax incentives for economic development.
Small business equates to approximately 98 percent of all business in New York and employs more than 3 million New Yorkers. However, while publicly celebrating their importance, he is excluding almost 90 percent of them.
Factor in his incessant push to bolster his progressive resume through the proposed escalation in labor costs via the minimum wage and this equation adds up to a net negative for Main Street and a “closed for business” sign on many doors.
Cuomo’s small business agenda can be simply summed up as gimmicky and window dressing masquerading as beneficial initiatives. By failing to broadly cut taxes for the small employers while dramatically increasing their labor costs, you have to question whether this administration has any understanding at all of the complex problems small employers face.
For small business, Cuomo’s “new New York” feels exactly like the high tax, anti-business state it always has been.
Mike Durant is New York State director for the National Federation of Independent Business.