More than half of New York state’s electorate wants to levy a temporary tax on bonuses of people earning $250,000 or more, a Siena College survey found.
Voters in the state, which relied on Wall Street profits and compensation for a fifth of its revenue in 2007, were 53 percent to 38 percent in favor of imposing a tax of as much as 50 percent on annual payouts, according to the survey released today. In January, President Barack Obama called for a crackdown on “obscene” Wall Street bonuses.
“Voters support the bonus tax irrespective of region, age or gender,” said Steven Greenberg, the survey’s director. “Democrats, independent voters and self-described liberals and moderates support it,” while groups including Republicans and conservatives oppose it, he said.
The state confronts a $9.2 billion deficit for fiscal year 2010-2011 in a $134 billion spending plan Governor David Paterson proposed in January. The deficit, up from an initially projected $7.4 billion, has grown in part because Wall Street paid more bonuses in stock and less in cash, which the state taxes immediately, Paterson has said.
A separate study today projected annual revenue of at least $6 billion through two years from four levies on Wall Street. The findings came from the New York-based Fiscal Policy Institute, a non-profit policy research group funded by labor unions and foundations.
‘Bonus Recapture’ Plan
The organization called for a “temporary bonus-recapture tax” that would start at 25 percent and reach 50 percent when total compensation passes $500,000; suspension of loss carry- forward provisions that let companies reduce their current and future tax liabilities based on losses in 2007 and 2008; a windfall-profits tax, and a temporary cut in rebates of stock- transfer taxes that refunded about $14.5 billion last year to Wall Street firms.
The top 25 hedge-fund managers received an average of $1 billion each for 2009, the institute stated. On Wall Street, bonuses surged to more than $20 billion last year, providing an average of at least $125,000 per worker in New York City, according to state Comptroller Thomas DiNapoli.
“While Main Street is mired in the Great Recession, Wall Street has never done better,” the group said. “Thanks to generous taxpayer-funded bailouts and federal policies uniquely privileging the big banks with virtually free money, the financial industry posted record profits of more than $61 billion in 2009, almost three times the previous record.”
The Siena poll, conducted last week, asked people whether they favored a temporary tax of 25 percent to 50 percent on bonuses -- not total income -- made by individuals earning at least $250,000 a year.
More women supported the proposal than men, 55 percent to 50 percent, and Democrats favored it more than Republicans, 58 percent to 42 percent. Two-thirds of self-described liberals backed it and half of conservatives opposed it, with 8 percent undecided. Catholics and Protestants gave it 53 percent support, while 43 percent of Jews backed it and 48 percent didn’t.
Among age groups, people 55 and older favored the bonus tax, 57 percent to 32 percent. Blacks supported it 54 percent to 30 percent. New York City residents backed it 52 percent to 35 percent; suburban voters supported it 50 percent to 43 percent, and it had support of upstate dwellers 56 percent to 39 percent.
Wall Street bonuses jumped 17 percent in 2009 from a year earlier as federal bailouts helped the securities industry rebound from the worst financial crisis since the 1930s. The bonuses had less effect than usual on state and city revenue because many financial firms paid a greater share in stock or other forms of deferred compensation, DiNapoli said on Feb. 23.
Paterson’s proposed budget relied in part on a 5.4 percent increase in personal income-tax revenue. Collections in January were $1 billion below the $7.08 billion forecast by the state.
New York lost 23,800 financial-services jobs in the year through March, including 15,800 in the securities and brokerage industry, the state Labor Department reported on April 15.
Paterson and New York Mayor Michael Bloomberg have each opposed increased taxes on high-income earners, warning that higher rates may push people and companies to leave the state.
Imposing higher taxes on Wall Street bonuses should be considered in light of the predicted state budget deficit, and a projected $4.1 billion gap the city must close in its $60 billion spending plan, city Comptroller John Liu said April 8.
Increased taxes on Wall Street firms and executive compensation “would be a disaster for this city,” Bloomberg said in a response that same day, speaking to business leaders at a Manhattan lunch. The mayor is the founder and majority owner of Bloomberg News parent Bloomberg LP.
“Our personal-income taxes for New York City are roughly $7 billion a year and 100 people pay 10 percent of it,” Bloomberg said. “You start driving some of those people out and they take jobs with them.”
The telephone survey of 806 registered voters, conducted April 12-15 by the Loudonville, New York-based Siena College Research Institute, had a margin of error of plus or minus 3.5 percentage points, and an error margin of plus or minus 7 percentage points among the 196 Republicans in the sample.
To contact the reporter on this story: Henry Goldman in New York at firstname.lastname@example.org