As I travel New York, I'm hearing over and over again the same top 2 concerns from voters - jobs and taxes - regardless of where they live. "We have too few jobs and too many taxes," is said again and again.I especially hear this message from small business owners and employees - whether the small PR firm owner in Rockland county, the small restaurant owner in Buffalo, the fast food chain clerk in Brooklyn or the owner of a small cleaners in the Bronx - who complain that business is slow but the tax burden remains high.
My suggestion is simple to President Obama and Congress. Be bold and cut taxes for main street by eliminating the payroll tax - for employer and employee - for at least 6 months for all businesses and for 12 months for firms or businesses 5 years old or less. Last week, I wrote in the New York Times that the payroll tax should be lowered for 6 months for firms 5 years old or less. I've since changed my mind and think we should expand on that idea as I listen to more and more small business owners worried that they may not survive this downturn. One business owner in the Bronx yesterday told me that he thought the actual unemployment rate in his community was above 50%. I asked what basis did he have for that guess. He answered, "I know my community and I know when sales are off, what that means."
Lowering the payroll tax immediately puts money in people's purses and wallets so they can spend in the communities they live, shop, worship and dine. Further, it is the fastest and maybe the most efficient way to get money to people who need it most.
Second, make permanent research and development tax credits and cuts that were passed last year. Lowering this tax permanently would help unleash the massive innovation in university labs and small start-ups across Silicon Valley, Upstate New York and other parts of the country in a way that would spur huge and long-term job creation in clean energy and information technology sectors. There are 15 million jobs to be created in the clean energy space over the next ten years. We should get our share of those jobs in New York and the rest of the nation. Making these tax credits permanent is an important step.
Second, the President and Congress should redirect some of the remaining stimulus money from states to cities to help jump start infrastructure, housing and jobs programs. This redirecting isn't designed to disadvantage or slight state governments but instead to accelerate the arrival of taxpayer money to needed city projects and programs to keep people working, avoid raising municipal taxes and not undermine the delivery of vital city services. We could certainly use it in New York City and State.
Finally, no bank tax is needed right now in New York. What's needed more is broad and smart financial reform, especially to grant shareholders more say on bank activities, limit taxpayer protection to non-risky banking activities, force 20% down payments for residential mortgages and regulate derivatives. But with almost 700,000 New Yorkers working in the financial services industry, an ill-conceived bank tax would drive up the city's 10.6% unemployment rate, undermine the tepid recovery underway in parts of New York and seriously compromise local and state funding of education, law enforcement and health services even more.
In closing, if I could give Washington one overriding message from New York voters about what they want right now - it's better, not more, government. Very simple.
These thoughts simply represent my reactions to what I'm hearing all across New York as I travel, listen and try to develop answers based on the specific challenges facing New Yorkers.
Will be in touch soon again about what I'm hearing and thinking. Thanks.
Harold
