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NY Report

NY Report

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Published by: liz_benjamin6490 on Dec 18, 2012
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04/29/2014

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New York faces the twin problems of revenue erosion and volatility faced by the other states studied by the Task Force. The
state relies on the sales tax for 16.6 percent of its tax revenue, compared to 32 percent nationally, so although the tax is
eroding, the problem is not as major as elsewhere. Volatility is the more significant problem: Moody’s Investors Service
noted recently that the state’s most significant financial challenges include “volatile state finances, due to above-average
dependence on income taxes.” Capital gains constitute a large share of income for high income taxpayers. Between 2007
and 2009 this income fell by $81 billion, causing a loss of $4.9 billion of state tax revenue. New York relies heavily on a
relatively small number of very high income taxpayers and has increased this reliance with steeply progressive income tax
increases adopted in response to the recession.

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