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New York State Comptroller Tom DiNapoli. Photo: Comptroller's office
New York State Comptroller Tom DiNapoli. Photo: Comptroller's office

NY Comptroller: fiscal cliff worst for low and middle incomes

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The budget showdown, with its possibility of the nation heading over a "fiscal cliff", has gotten lots of attention in recent weeks. If Congress doesn't make a budget deal by year's end, it will trigger an end to many tax breaks, and automatically cut spending on federal programs.

In his blog this week, Watertown Mayor Jeff Graham calls all the concern "media hype." He says it doesn't matter if tax rates revert to the levels they were before President George W. Bush took office.

New York State Comptroller Tom DiNapoli disagrees. He says the other side of the fiscal cliff will be particularly bad for New York's middle and lower income families.

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Reported by

Julie Grant
Reporter and Producer

DiNapoli told a group of business and labor leaders in Manhattan Thursday that the fiscal cliff is like an anti-stimulus.

"The fiscal cliff threatens all New Yorkers, but particularly middle class and lower income families, who I think would bear the brunt of the combination of tax hikes and cuts to very critical programs."

DiNapoli released a report this week about the impact of the fiscal cliff on New York. He says New Yorkers will face $43 billion in tax increases in the coming year. 

If legislators don't make a budget deal before year's end, DiNapoli says middle and lower income families in New York will immediately see reduced paychecks. The payroll tax would rise two percent. Itemized deductions would be capped, and the earned income tax credit would be cut in half - from $1000 to $500 per child.

At the same time, New York communities would get less assistance from the federal government.

"Division of budget has estimated that if the budget cuts go forward over time, our state and localities could lose $5 billion, I've seen some estimates that are even higher, in federal aid to a variety of programs."

DiNapoli says the loss in aid includes more than $600 million in 2013 alone, in education programs, health and human services, public housing, transportation, and others. But DiNapoli isn't lobbying for the alternative plans being discussed in Washington. He says those could also have harmful effects on New York.

WNYC provided audio for this story.

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