Don’t call Governor Kathy Hochul a grinch. Earlier this month, she announced a plan for an “inflation refund,” which would offer one-time payments of $500 for families earning less than $300,000 and $300 for individuals earning under $150,000. The $3 billion program, funded by excess sales tax revenue, is meant to help New Yorkers facing rising costs.
But will it?
Hochul’s proposal is a quick headline-grabber, not a real solution. Handing out one-time checks may sound good as temporary relief, but risks fueling inflation by giving people extra cash to spend without fixing deeper economic issues.
If the governor truly wanted to help, she’d focus on reforming the state’s outdated tax system—starting with indexing income taxes to inflation. From 2011 to 2016, New York indexed its tax brackets, ensuring they adjusted for inflation. Indexation would prevent inflation from taking away more of what New Yorkers earn. But the practice was left to sunset under Governor Cuomo, leaving taxpayers vulnerable to "bracket creep."
Continue reading the entire piece here at RealClearMarkets
______________________
Paul Dreyer is a Cities Policy Analyst at the Manhattan Institute.
Photo by Howard Schnapp/Newsday RM via Getty Images