Tax Battle
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Just how one-sided is the tax policy debate in New York City? The big fight this week between Mayor Bloomberg and the City Council concerns not whether to raise taxes or reduce them. Both sides are for tax increases. The battle is simply over which tax to increase. The mayor is floating a reversal of a 7% reduction on property taxes. That would amount to a 7% increase in property taxes, at a time when at the state level, Democrats such as Governor Paterson and Nassau County Executive Thomas Suozzi are advocating a cap of 4% a year on property tax increases. The City Council, meanwhile, is proposing to increase the city’s tax on hotel rooms to 8% from 5%, which is a 60% increase.
Even that understates the level at which hotel rooms would be taxed under the council’s plan. A $200 a night hotel room in the city is already subject to an 8.375% city and state sales and use tax — $16.75. There’s a $1.50 a room tax on top of that to pay for the “Javits Center Expansion,” which has not happened and doesn’t have much prospect of happening. And the current 5% tax comes on top of a $2 flat fee. Add it all together and it brings the total current tax on a $200-a-night Manhattan hotel room to $30.25. The Council wants to raise that to $36.25, making that $200 a night room cost $236.25.
Here’s an idea for the mayor and the council: instead of fighting over what taxes to increase, how about discussing which taxes to reduce? New Yorkers are already straining under one of the highest state and local tax burdens in the nation. While some services — the NYPD, the city’s parks — are the best in the nation, others are decidedly mediocre. City bureaucrats enjoy retirement benefits and parking perks that are better than those offered in the private sector. Government spending has soared — the city’s Department of Education has seen an increase of nearly 80%, or more than $4.6 billion, since 2002, while, for all the welcome changes to the city’s schools, scores on national standardized tests have been essentially flat, at best slightly improved.
The politicians make the case that the city’s budget is strained by the slowing economy. But so are the budgets of individual households. An economic slowdown is a moment to help taxpayers out and spur the private sector economy by reducing taxes, not seizing more money from individuals and taking it for the government.