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Grassroots Bulletin

March 2012 Grassroots Newsletter



FEDERAL

Obama Proposes to Lower Corporate Tax Rate

President Obama's long-awaited business tax plan unveiled in late February would lower the corporate tax rate from 35 percent to 28 percent while eliminating popular business tax breaks, making it unlikely to get far in Congress in this election year.

The goal of the president’s plan is to make U.S. companies more competitive by reducing the effective corporate tax rate in the United States to be on par with other major industrialized nations. The plan would make up lost revenue as a result of the lower rate by eliminating what the president calls “tax loopholes” and simplifying a business tax system he calls “uncompetitive, unfair, and inefficient.”

The plan proposes to eliminate all tax breaks for specific industries, including oil and gas. The plan mentions possibly eliminating the current accelerated depreciation schedule meant to encourage business investment, and reducing the amount of interest payments corporations can deduct. Several of the costlier tax breaks, including accelerated depreciation, would have to be eliminated, according to the plan, to get the corporate rate down to 28 percent without raising the deficit.

Tax breaks for three industries would continue: manufacturing, research, and clean energy.  For instance, one popular break – the tax credit for research and experimentation – would become permanent. The plan would require, however, that any corporate tax breaks Congress retains be fully funded. According to the president, all current corporate tax loopholes add about $25 billion a year to the deficit. 

Some Republicans denounced the proposed tax cut as an election-year ploy.  Manufacturers applauded the goal of the plan but not the specifics. "The president suggests some changes that will help, but many of the proposals completely miss the mark and would make U.S. businesses less competitive," said Jay Timmons, president of the National Association of Manufacturers.

The Treasury Department has been working on corporate tax reform for two years.  Treasury Secretary Tim Geithner acknowledged that the corporate tax code may have to wait for overall tax reform, but said such reform would take much longer to negotiate with Congress. The last time the tax code was overhauled was in 1986.



STATE

Cuomo Continues Push for Pension Cost Cuts

Governor Andrew Cuomo is putting pressure on state lawmakers to support his plan to cut pension costs, saying the effort is a top priority of his second year in office and critical to reducing the state’s overall tax burden.

Cuomo said his pension proposal would save taxpayers $113 billion over 30 years.

But State Comptroller Thomas DiNapoli, a democrat, said the proposal will not save as much as Mr. Cuomo claims and won’t provide enough for most public employees to retire in the future.  Mr. DiNapoli is by law the pension fund’s sole trustee.

The Cuomo plan would change the pension system to limit what he calls abuses of employees working more overtime just before retirement to increase their pension payments. The plan would also offer a variation of a 401(k) plan, in which the state would contribute about half of what it contributes now. Mr. DiNapoli said 401(k) retirement funds are not an appropriate substitute for a guaranteed pension.

The Senate’s Republican majority and the Assembly’s Democratic majority have said they support parts of Mr. Cuomo’s proposal.  Both houses of the Legislature are expected to propose their own respective state budgets March 12.  Mr. Cuomo, Senate Majority Leader Dean Skelos, and Assembly Speaker Sheldon Silver will try to negotiate a 2012-13 state budget before the April 1 deadline.  Legislature leaders have said they may reach an agreement a week before that deadline.



LOCAL

NYC Councilmembers Support Cuomo Public-Financing Plan for Elections

Twenty-seven New York City Council members sent a letter to Governor Cuomo supporting his plan to create a public-financing system for the state’s elections.

Governor Cuomo first presented the idea in his January 2012 State of the State address.  A group of civic, business, and philanthropic leaders, labor unions, and advocacy groups have organized to encourage the New York State Legislature to take up the issue.

Using New York City as an example of an effective way to publicly finance elections with matching funds, the letter contends that public-financing programs are one way to help address the potentially corrupting influence of big money in politics.  “While the city’s system has evolved since its inception in 1988, the matching-funds program, low contribution limits, and pay-to-play laws have made it a model for jurisdictions across the country," the letter states.

The New York City Council letter also cites the Supreme Court’s decision on Citizen’s United, which held that the First Amendment prohibited the government from restricting political expenditures by corporations and unions. That decision is seen as paving the way for the creation of independent political action committees, sometimes called Super PACs.  These organizations can accept unlimited contributions from individuals, unions, for-profit businesses, and nonprofit groups and spend these funds independently.



EXPLORE AND CELEBRATE JAZZ

The next Lunch & Learn takes place on March 21, from noon to 1 p.m., in the Edison Room at 4 Irving Place, in Manhattan.  Join Eli Yamin, pianist, educator, and Jazz at Lincoln Center teaching artist for a lively exploration and celebration of jazz.  Come hear what makes this American art form so loved and treasured around the world, what makes jazz swing, and what it can teach us about teamwork, problem solving, and our own creative capacity.

Jazz at Lincoln Center is dedicated to inspiring and growing audiences for jazz. With the world-renowned Jazz at Lincoln Center Orchestra and a comprehensive array of guest artists, Jazz at Lincoln Center advances a unique vision for the continued development of the art of jazz by producing a year-round schedule of performance, education, and broadcast events for audiences of all ages.

RSVP to powerofgiving@conEd.com



CIVICS QUIZ

How many U.S. presidents served in the U.S. House of Representatives at some point in their careers?

Submit your answers to grassroots@conEd.com with "Civics Quiz" in the subject line for a chance to win a pair of entries to Bike New York on May 6.

Congratulations to Daniel E. Brown who correctly answered the last quiz question: “Former Massachusetts governor and GOP presidential candidate Mitt Romney ran the 2002 Winter Olympics in what American city?”  The answer is “Salt Lake City.”  Daniel won a pair of tickets to see a dance performance at New York Live Arts.

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