WASHINGTON - New York Governor Andrew Cuomo is airing TV ads around the country that offer tax-free status for 10 years to new business start-ups entering his state.
The ads' claims are deceptive because they come with a lot of government strings attached. You only get a tax cut if you put your business where the state tells you to put it, plus meet other state requirements. Critics say Cuomo's sweeping claims are not what they're cracked up to be.
Once again, not unlike President Obama's tax credit proposals, the Democrats think they can dictate the rules that produce successful businesses and lots of jobs. It did not work nationally, and it isn't going to work in New York where, after Cuomo's first three years in office, the statewide jobless rate remains over 7 percent.
In New York City, unemployment is a recession-leaning 8.1 percent.
"Will Gov. Cuomo ever stop with the tax gimmicks? Our beleaguered state economy needs more than political plans that pick winners and losers," the New York Post lectured the governor last month.
The exaggerated claims in Cuomo's "Start-Up NY" TV ads do not to reach out to major retail and wholesale firms, or medical service businesses and many other business sectors. Instead his tax cut plan focuses on high-tech and manufacturing companies that must locate their firms on or near predominantly "upstate" university campuses.
Moreover, businesses that qualify could lose their tax-free status if they do not produce the required number of jobs under Cuomo's program. "And the program Cuomo called 'bold' is limited to just 10,000 jobs -- one tenth of a percent of the private-sector jobs in New York," the Post said.
In another blistering critique last week, Americans for Tax Reform, an anti-tax lobbying group, said "Cuomo is blowing smoke" on his tax cut claims.
"A closer examination of Gov. Cuomo's proposed tax changes reveals that in most cases, they would not result in a net reduction in New York's state and local tax burden," they said.
In fact, upon closer examination of the tax plans' details, it is shifting of tax burdens, rather than reducing tax rates.
E. J. McMahon, who heads up the Empire Center for Public Policy, has testified that more than half of Cuomo's proposed "tax cuts" in property tax relief are actually "a tax shift. That is, they take a levy that is being assessed on the local level and shift it to the state level," ATR said.
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