Governor Cuomo’s bank tax reform
March 19, 2014
While most people deal with banks either for mortgage loans or checking and saving accounts, banks also provide other services like buying and selling stocks, bonds and investment products. Governor Cuomo’s bank tax reform applies only to these other services. The executive budget calls for banks to only pay taxes on 8% of the revenue they make from these transactions.
While critics of the plan call the reform “a giveaway to the banking industry,” the Business Council disagrees, arguing that the break will create good paying jobs in New York State.
But why should one of the wealthiest business sectors get a tax break in the state budget at all? Here is a clip of WCNY’s The Capitol Pressroom host Susan Arbetter asking that question, and the Business Council’s Vice President of Government Affairs Ken Pokalsky responding:
Arbetter: A question that critics have is ‘Why do banks get this at all when these are the same ‘bad actors’ that helped to create the housing crisis, that were then bailed out, then they incorporated robo-signing into their repertoire of not-very-nice deeds against the consumer? Why now this?
Poksalsky: Two things, there are about 800, give or take, bank taxpayers in this state—are you suggesting that these are the sorts of things they all did? Even if the things you said are true, it’s a small share of the banks. And the second part, the thing that is really relevant today, this is about New York State’s economy and New York State jobs. This is an important industry in New York State; this is going to help that important industry in this state, which drives the budget and the ability of the state to spend money on things that even the Left likes. I’s important to us and [bank tax reform] helps keep them here.
Both sides of this debate are represented in the budget negotiations taking place in Albany. The Assembly includes no break for banks in its one-house budget bill. While the Senate’s budget resolution includes bank tax reform, it is much less generous than the type of break the Governor is pushing for. The final budget is due on April 1st.