Truth Squad: Are Giuliani's Tax Cuts Exaggerated?

CNBC ^ | 04 Oct 2007 | 05:35 PM ET | Carl Quintanilla

[Fred]

Rudy Giuliani is getting out in front of next week's CNBC presidential debate with a seven-day media blitz touting his record as an economic conservative.

In it, he claims to have cut taxes 23 times as mayor of New York. And he says New Yorkers had a 17% reduction in tax burdens during his tenure.

Giuliani takes credit for cutting taxes on everything from property to sales of clothes — even coin-operated amusement devices.

But a closer look at the numbers show he's claiming credit for some tax cuts that weren't his idea to begin with. And others that he actively opposed.

For instance, seven tax cuts that he says were his were actually initiated by New York State. Giuliani may have supported the measures, but they were never floated by his office. That's according to the Independent Budget Office, a publicly funded watchdog group.

Then there's the granddaddy of New York tax cuts -- the ending of a 12.5% surcharge on personal income tax. Giuliani cites it as his No. 1 achievement on taxes -- and he did initially propose it, but then later dropped his support for the measure, even fighting it before finally giving in to the city council. It was the largest New York City tax cut in history.

FactCheck.org says Giuliani probably deserves credit for $5.4 billion in tax reductions — not the nearly $10 billion he claims.

When it comes to taxes, Giuliani may, in fact, be a conservative. But his critics say he's also guilty of a little exaggeration.

[Fred]

Rudy better get his story straight before the CNBC/WSJ debate Oct 9th.

[Reagan Man]

Eight cuts on Giuliani's list that actually came from Albany

~ A new college tuition deduction/credit

~ A sales tax exemption for utility transmission and distribution

~ A sales tax exemption on Web hosting and HDTV equipment

~ A reduction in taxes on bank mutual fund companies

~ A cut in the marriage penalty

~ A group of miscellaneous sales tax exemptions

~ School Tax Relief, or STAR, a rebate for a portion of property taxes paid

~ Another STAR program, this one applied to income taxes Source: NYC Independent Budget Office

[Reagan Man]

From the Manhattan Institute for Policy Research (Edmund J. McMahon):

"Even with the tax cuts of the last several years, New York remains by far the most heavily taxed big city in the country."

TAXES: From 1996-2001 Giuliani and the City Council agreed to reduce marginal city income taxes by some $2.0-billion, an effort that offset the $1.8-billion tax increase put in place by Mayor Dinkins a few years earlier. So in reality, individual city income taxes were actually cut by a modest $200-million. Giuliani made no effort to make permanent changes to the city income tax code. Giuliani even fought efforts to abolish a 12.5% tax surcharge. The primary reason Rudy and the City Council agreed to cut business taxes, was to make NYCity more appealing to companies thinking about locating/relocating to the Big Apple. A smart move, however, when Rudy left office he left NYCity straddled with some of the highest income, sales, property and general corporation taxes in the entire nation.

[elizabetty]

I would like to see a list of his tax increases.

[RabidBartender]

Heh - with taxes crossed off, the Rudy supporters are truly one-issue folks now: talking a big game about the War on Terror.

[businessprofessor]

The largest business tax reduction was the removal of the garbage tax. The mob had a stranglehold on the garbage hauling business for many decades. The cost to remove garbage was enormous. An undercover New York detective and a legitimate hauler worked together to gather evidence that eventually led to many indictments. The mob lost its influence on garbage collection and the price plummeted. For example, a restaurant owner thanked Guiliani in 1997 for his tax cut. Guiliani was a little confused about the tax cut that the business owner referred. The business owner said the garbage tax. He said that his garbage collection costs had fallen from $1,000 per month to $50 per month.

[CTSeditor]

Then vote for Hillary...

[calcowgirl]

I read some of the prospectuses filed with the SEC by the bond brokers during Giuliani’s reign. He borrowed his way through his tenure (surprise, surprise). When he hit the constitutional limit on borrowing, they set up two new “Authorities” that issued more debt—that didn’t count against the city’s debt limit formula. Something like 18-20% of city revenue now goes to debt service alone. While he says he reduced taxes, the personal income tax surcharge that was due to expire when he took office was extended up until his last year in office, then “restructured” to expire on a declining scale over future years—after he left office (the surcharge was about 1/2 billion a year which dwarfed the other tax decreases). Yet other tax decreases were put into law but not implemented until after he left office. He says he left the state with a big surplus but, when he left, the projected multi-billion dollar gaps between revenue and spending were double what they were when he took office.

[calcowgirl]

During the boom years of the 1990's .... Revenues went up every single year. So the city was able to maintain an increase in spending right through the end of the decade. Essentially, city and state government could cut taxes and improve services during these growth years, both desirable goals and both things that the public demanded and remember we have a democracy.

Unfortunately, when the boom ended and the economic cycle turned south, we were left with a tax structure that provided $3 billion less in revenue every fiscal year than it did at the beginning of the '90s, but with an expense burden almost 70 percent greater than existed back then. Let me repeat those numbers. Our annual tax revenues are $3 billion less per year, our expense 70 percent more over the decade. And the attacks of 9/11 just exacerbated that problem.

-- Mayor Michael Bloomberg December 7, 2002 [source]

[SoConPubbie]

NO, don’t think so.

Won’t need to vote for Rudy either as he won’t be the nominee. He can’t even break 30%. He ain’t going nowhere except down and out of the race.

I cannot thank God enough for that fact!