July 06, 2011

To Move Budget Debate Forward, Gillibrand Urges Colleagues To Choose Tax Breaks That Create Jobs Over Tax Breaks For Millionaires

Ending Tax Breaks For Millionaires Would Save Taxpayers $22 Billion Each Year

Washington, D.C. – Making job creation her top priority in the debate over the federal budget, U.S. Senator Kirsten Gillibrand is urging her colleagues to pass legislation that cuts taxes for businesses that create jobs while ending tax breaks for millionaires and billionaires that America cannot afford. Ending tax breaks for the wealthiest Americans would provide approximately $22 in savings billion each year for U.S. taxpayers.   

Senator Gillibrand is co-sponsoring a resolution that states any agreement to reduce the budget deficit should require those earning $1 million per year or more must make a more meaningful contribution to deficit reduction.

Additionally, Senator Gillibrand introduced legislation with Senator Bob Casey (D-PA) that offers businesses tax credits for every new job they create. Economist and former economic advisor to Senator John McCain’s presidential campaign, Mark Zandi, estimates this type of tax credit could create upwards of 700,000 new jobs in a short period of time.

“The best way to cut the deficit is to put people back to work,” Senator Gillibrand said. “We can’t afford tax breaks for the wealthiest few Americans who are doing just fine in this tough economy. Keeping these tax breaks only adds to our mounting deficit and pushes us closer to default. We need to put the middle class first with smart tax policy that can actually benefit this country – by creating jobs and putting Americans back to work.”

The Wall Street Journal reported the median pay for CEOs of S&P 500 companies rose nearly 20 percent last year, to $2.9 million. Twenty percent of all income in the U.S. is earned by the top 1 percent of individuals, who also account for four-fifths of income gains accrued over the past quarter century.

Meanwhile, the median family income declined more than $2,500 over the past decade.

Across the state, more than 330,000 more New Yorkers have gone unemployed since the Bush-era tax cuts for the wealthy were established.

Click here for county-by-county data.  

  • In New York City, since the Bush tax cuts were enacted in 2001 there are approximately 150,000 more people unemployed.
  • In Western New York, since the Bush tax cuts were enacted in 2001there are approximately 20,000 more people unemployed.
  • In the Rochester-Finger Lakes region, since the Bush tax cuts were enacted in 2001there are approximately 20,000 more people unemployed.
  • In Central New York, since the Bush tax cuts were enacted in 2001there are approximately 20,000 more people unemployed.
  • In Southern Tier, since the Bush tax cuts were enacted in 2001there are approximately 9,000 more people unemployed.
  • In the Capital Region, since the Bush tax cuts were enacted in 2001there are approximately 20,000 more people unemployed.
  • In North Country, since the Bush tax cuts were enacted in 2001there are approximately 10,000 more people unemployed.
  • In the Hudson Valley, since the Bush tax cuts were enacted in 2001there are approximately 40,000 more people unemployed.
  • On Long Island, since the Bush tax cuts were enacted in 2001there are approximately 50,000 more people unemployed.

In addition to urging her colleagues on both sides of the aisle to agree we can’t afford to continue subsidizing millionaires, Senator Gillibrand introduced legislation that would provide businesses a tax cut worth 15 percent of the cost of a new job.  Small businesses, responsible for half of all private sector jobs and 70 percent of all jobs created over the last decade, would receive an additional 5 percent, allowing them to deduct 20 percent of their increased payroll costs. 

The tax cut would be structured based on a firm’s quarterly payroll increase over the previous year, meaning companies would also have an incentive to expand part-time workers to full-time, or eliminate salary cuts instituted during the downturn.  This would also provide protection against fraud by preventing employees from doing things like firing and re-hiring employees to claim the tax cut.  The legislation would also contain additional protections against abuse by including protections such as limiting the tax cut claimed by any one firm to $250,000, and exclusions for mergers or acquisition where no new jobs are actually created. 

Senator Gillibrand believes that the job creation tax cut, with appropriate safeguards, is one of the most efficient ways to create a large number of jobs quickly. It would address what is perhaps the most persistent and harmful aspect of the economic downturn: unemployment. Such a measure not only is an efficient way to create a large number of jobs quickly, but also bolster long-term economic recovery investments -- from high-speed rail and health care information technology, to rural broadband and a smart energy grid.