Back in January, Sip & Savor spent four days breaking down the conflict between New York Gov. David Paterson's slew of proposed tax hikes on everyday New Yorkers and President Barack Obama's pledge to provide tax cuts, job protection and stimulus for economic growth.
On the one hand, President Obama was promising a stimulus package that would give a tax cut to 95 percent of Americans and help protect jobs and create new ones. But on the other hand, Gov. Paterson was proposing 137 new tax hikes totaling more than $4 billion - a move that threatened to cost New Yorkers more money at the store and thousands of them their jobs.
The bottom line for New Yorkers looked bleak: no matter what relief President Obama might have provided at the time, it would be overwhelmed by Gov. Paterson's tax hikes. But now the governor seems to be teaming up his plan with the President's plan - namely by using stimulus money to scrap numerous tax hikes to the benefit of New Yorkers and their jobs.
Since it is baseball season, we'll use a stretched baseball analogy. If Gov. Paterson is the set-up man who walked the bases loaded, then President Obama emerged as Mariano Rivera (or, we should say Bobby Jenks as the president is a devoted White Sox fan) to provide the governor with a potentially big save.
The American Recovery and Reinvestment Act - better known as the "stimulus package" - delivered to states billions of dollars to directly help their citizens weather the recession. Putting aside for the moment the merits of the stimulus' sizeable use of taxpayer dollars -- the top priority set out by President Obama for use of the money was to create or save 3.5 million jobs in America in the next two years. Well, just by scrapping the proposed 18 percent tax on regular soft drinks and juice drinks, Gov. Paterson protected more than 6,000 jobs in his state alone.
The next priority was to provide direct relief to working and middle-class families. According to the Obama administration, this includes money to states for use in fiscal relief and investments that benefit working families. Thus, by eliminating $1.3 billion of his proposed taxes on everyday products such as clothes, shoes, soda, haircuts, cable and satellite service, movie and theater tickets, home improvements and music downloads, Gov. Paterson used the stimulus money to provide important financial relief for hard-working families.
In an economy like this, the last thing government should be doing is raising taxes on the middle-class: especially on their everyday goods and services.
So kudos to Gov. Paterson for listening to New Yorkers and for using the stimulus package the way it was intended: to protect jobs and keep costs low for people so they can begin climbing out of this recession.
Now, there's still $2.8 billion in new taxes on consumer goods and services remaining in the governor's budget, but Newsday said he's open to eliminating those as well. This will certainly help ensure that the modest tax cuts President Obama is providing Americans end up as a net positive in New Yorkers wallets.
To stick with our baseball analogy: Gov. Paterson and New York government got into a jam. President Obama got them out of it, for now. Next, we'll see if leaders can finish the job and save a total victory. If so, New Yorkers - from its hard-working families to its job providers - will truly be on the road to economic recovery and brighter days ahead.
There's a crucial lesson in New York for policy-makers across America; we'll get into that next week.