OP-ED
Crain's New York Business
PARTNERSHIP FOR NEW YORK CITY
New York, New York
October 16, 2011
Business Leaders Speak their Minds
Group urges Congress and White House to reform the tax code and restructure entitlement programs.
New York business leaders, led by American Express CEO Ken Chenault and Macy's CEO Terry Lundgren, went to Washington, D.C., on Oct. 13 to urge that Congress and the White House agree on a bipartisan plan to reform the tax code and restructure entitlement programs as the best path out of our nation's fiscal and jobs crises. They argued that employers will start hiring again—and consumer confidence will be restored—only when our political leaders rise above partisan deadlock and chart an entirely new course.
This summer, as a condition for raising the national debt ceiling, a Joint Select Committee of Congress was charged with delivering a plan for a $1.2 trillion reduction in the federal deficit by Nov. 23. If they cannot agree on such a plan, it will force a major, across-the-board cut in federal expenditures, beginning in 2013.
Either way, New York gets killed. Already under consideration are the elimination of state and local tax deductions from federal income tax obligations, caps on deductibility of charitable contributions, and cuts in funding for the nation's large teaching hospitals, which are heavily concentrated in our city. Similarly on the
block are public transportation aid, health care reimbursement and homeland security funds for anti-terrorism activities.
Favored revenue proposals would be equally hard on New York and dig into the pockets of state and local government, such as increased rates on carried interest income and surcharges on high earners, of which New York has a disproportionate share. On the other hand, no one is seriously talking about a gas tax, which the cardependent parts of the country will never allow to surface.
There are several bipartisan blueprints for how a simplified tax code that eliminates special-interest loopholes for individuals and corporations could raise needed revenues while lowering tax rates for the vast majority of taxpayers. Well-thought-out proposals to reduce costs of entitlement programs, such as putting a means test on eligibility for Social Security benefits, are also available.
The necessary tax simplification, budget and entitlement reforms were laid out in the report of the Bowles-Simpson National Commission on Fiscal Responsibility and Reform, which has the most traction across party lines. And that is the approach that business leaders argued should be adopted by the Select Committee.
New York has a lot to lose if cuts and revenues are either arbitrary or determined via partisan political negotiation. Our interests lie with a strategic, balanced plan that promotes long-term fiscal health and economic growth. Right now, adoption of such a reasoned approach does not seem likely, but the Select Committee and
congressional leadership could make it happen.
The message delivered by our city's major employers was that a commitment to bold action and fundamental reform, along the lines of Bowles-Simpson, is the only thing that will get the American economy back on track.
Let's hope the government heard it.
Kathryn Wylde is president and CEO of the Partnership for New York City.