Home MTA Economics Poll finds majority support for MTA payroll tax

Poll finds majority support for MTA payroll tax

by Benjamin Kabak

There are fewer taxes more controversial in New York State right now than the payroll tax passed a few years ago to support the MTA. Levying a tax of 0.34 percent on businesses in the 12 counties serviced by the MTA, the tax has generated around $1.3 billion annually for the MTA, and it has drawn the non-stop ire of New York Republicans, some of whom have made trying to repeal it their life’s goal. Yet, a new poll shows reasonably strong support for it throughout the state.

According to a Quinnipiac poll, 56 percent of voters support the payroll tax. Forty-five percent say the tax is fine as is while 11 percent would increase it. Meanwhile, 24 percent of voters would like to see the tax repealed completely while nine percent would prefer it decreased. These results seem to jibe with other numbers that show a strong upstate/downstate divide over MTA support.

A whopping 59 percent of upstate voters oppose additional state support for the MTA while 55 percent of New York City voters want more state subsidies. Overall, New Yorkers oppose additional support for the MTA by a 51-42 margin, and voters seem to realize that repealing the payroll tax in the 12 MTA counties would lead to more state subsidies in another form. The MTA, after all, is counting heavily on the money to avoid service cuts and unplanned fare hikes.

Yet, despite this showing of support, the Republicans in the Assembly have been tirelessly advocate for a repeal. On Staten Island, business leaders and politicians have been railing against the tax, and state GOP representatives held an anti-tax hearing earlier this week with a focus on Staten Island and Brooklyn. Former New York City Comptroller and failed Mayoral candidate Bill Thompson called for a payroll tax repeal in The Post this week, but his plan includes other state subsidies.

The complaints for business leaders and politicians deserve a closer. Especially among Staten Island and Bay Ridge residents who seemingly suffered the most from the 2010 bus cuts, complaints focus around services. Business owners claim their employees drive and derive no benefit from public transit while others say they are taxed more for even less service. Of course, it’s tough to take these forums too seriously when people start calling the taxes “basically un-American” and “discriminatory.”

The concurrent problem is one of politics. State GOP Assembly representatives know a payroll tax repeal won’t make it through Sheldon Silver’s Assembly, and they have offered no better solution. Taking a page from the Lee Zeldin handbook of incomplete ideas, Assemblywoman Nicole Malliotakis said the MTA could, according to SI Live, “could make up the shortfall by selling off real estate, streamlining bloated executive salaries and renegotiating vendor contracts.” If the authority could generate $1.3 billion through those measures — most of which provide only one-time benefits — I have a bridge to sell Ms. Malliotakis.

Ultimately, the end of the payroll tax will come as part of a bargain: Institute congestion pricing or toll the East River Bridges, and the payroll tax can be similarly reduced. I can’t imagine suburban residents or Staten Island politicians would be too thrilled with that bargain, but the only other outcome would be a seriously starved MTA forced to cut services and hike fares. Who wants that anyway?

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24 comments

Eric F. October 27, 2011 - 1:19 pm

It’s not surprising that there is support among people for a tax that people think they don’t pay. An employer must get the money to pay his payroll tax from the chest of gold he has buried in the back yard. There’s no way that the tax could possibly be viewed as just another cost of labor and affect wages downward in like proportion. This is the reason that “corporate income taxes” are hugely popular. Obviously because corporations pay these taxes the people who work for and buy from the corporations must escape them unscathed. In other words, this poll says more about the people who answer the question than about the wisdom of the policy. If the same people would object to a direct tax on their own wages in the amount of the payroll tax, but nevertheless support the tax on their employer’s wage payment, then they aren’t very bright people.

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BBnet3000 October 27, 2011 - 2:20 pm

Youre making a good point but youve gone too far the other way. An indirect tax is not the same thing as a direct tax.

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Eric F. October 27, 2011 - 2:23 pm

One of the problems with the way the MTA is financed is that there are a ton of little taxes sprinkled all across NY economic activity from taxes on real estate transfers, to utility bills, to retail sales, to tolls, to payrolls, that even a sophisticated person who is paying attention will have no idea how much of his income is being sucked into the MTA maw outside the farebox. It’s a really underhanded way to finance the system.

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Nathanael November 11, 2011 - 4:29 pm

Payroll taxes do, indeed, get treated as “cost of labor” and cause employers to reduce employment.

Corporate *income* taxes are taxes on *profits*. They do not cause *any* change in the behavior of corporations. People who work for and buy from the corporations *do* escape them unscathed. This is because of the way they work: they are taxes on *PROFITS*. The corporate management will generally attempt to maximize profits, regardless of the level of taxes on profits, and taxes on profits *do not affect* what the profit-maximizing behavior is.

There is a reason why taxes on net profits, like the corporate income tax, are considered “not economically distortive”, unlike taxes on sales or payroll.

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Geoff October 27, 2011 - 1:34 pm

How about a 150% tax on all the fraudulent disability pensions payments that have been obtained by LIRR employees?

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Benjamin Kabak October 27, 2011 - 1:56 pm

On the, erm, bright side, at least the LIRR retirees were defrauding the federal government and not the MTA. So this giant scam didn’t hit the MTA’s bottom line at all.

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Larry Littlefield October 27, 2011 - 3:14 pm

The fake medical services probably affected the cost of retiree health care. And do you think the kind of attitude that led to this sort of abuse kicked in the day of retirement?

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Larry Littlefield October 27, 2011 - 1:38 pm

I have offered a better solution. Make the tax optional for NYC and the counties.

Eliminate the MTA bus system, turning the facilities over the NYC and the counties. They can keep the payroll tax to pay for it, or not. As for transfers, they can be kept free — if all the revenue is counted as subway revenue. NYC’s choice, and the choice of the other operators.

The expertise required to run bus systems, and labor that can maintain and drive those kinds of vehicles, is much more widely available than for rail. NYC and the counties can handle it.

Then we can move on to how to better finance the Metropolitan Railroad Authority.

BTW, to the TWU commenter who once complained that the MTA always looks to the subway for savings but there is more waste elsewhere, check the news. You’ve got a point.

Someone who had a relative who worked on the private LIRR before takeover says this kind of stuff goes back a century there. Labor AND mangement. Where is the RICO lawsuit?

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nycpat October 27, 2011 - 6:29 pm

Any attempt by a TWU Local 100 member to get a disability pension is fought tooth and nail by NYCTA. You would have to be maimed while being completely blameless.

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Donald October 27, 2011 - 9:12 pm

The MTA rail roads are so corrupt. My father is a retired NYCTA condcutor and he applied to become a Metro North conductor recently and did not even get an invite to take the exam. Meanwhile, people with no transportation experience at all did get an invite to take the exam. Yeah, I am sure they are more qualified… NOT.

They really need to clean up the rail roads. Fraudulent disability claims are just the tip of the iceberg. The REAL fraud is in the hiring process.

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Larry Littlefield October 27, 2011 - 9:21 pm

I think they should merge the titles, although the commuter railroad unions would fight it.

Commuter railroad train operators should be promoted from subway operators, if they could manage the more difficult tasks — the book of rules, no automatic stop protection, etc.

Those working on the ROW should probably be paid more if they work on a subway/elevated than on the commuter railroads.

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nycpat October 27, 2011 - 11:55 pm

If he is retired-retired- from the NYCTA he is ineligible to work at other MTA outfits and most NY state government jobs. That said I don’t like the opaque nature of the hiring process at the RRs. NYCT’s recent move to in-house testing does not bode well for the future. At least with DCAS you would get a square deal.

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Nathanael November 11, 2011 - 4:32 pm

NYCT has a reputation for *shirking* among maintenance workers. But that’s it.

Metro-North has a reputation for *overtime padding*. But that’s it.

LIRR has a reputation for every single scam and work rules abuse out there. It appears to be a cesspool, in corruption terms. Very odd.

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Tsuyoshi October 27, 2011 - 3:02 pm

I think it’s pretty sad that only 55% of New York City voters want more state subsidies for the MTA. I would be interested in knowing how this breaks down.

What proportion of transit users don’t vote? I’m sure it’s higher than non-transit users.

What proportion of transit users have internalized the “MTA is crooked and incompetent” theme?

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normative October 27, 2011 - 5:18 pm

The problem is that most people have no clue how the MTA is funded, or generally any of the issues of the TA from what they read in our daily tabloid papers of the Daily News and the Post. I want to conduct my own poll on the issue. The biggest issue is the lack of funding from the state, especially as a portion of total revenue when we compare to systems in london, paris, tokyo, etc. Yet, this rarely manifests itself in the debate or political dialogue.

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Alex C October 27, 2011 - 10:47 pm

People think the MetroCard swipes and unicorns pay for everything in the MTA. There needs to be better education on this issue.

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Andrew October 28, 2011 - 6:59 am

Or at least more unicorns.

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Billy G October 27, 2011 - 4:45 pm

How about raising the fares and implementing zone pricing for the subway instead of these stealth taxes? Make the user pay.

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Benjamin Kabak October 27, 2011 - 4:48 pm

I’m not a big fan of zone fares for NYC, and I explained why in April.

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JAzumah October 28, 2011 - 8:55 am

It is illegal for the MTA to have a zone fare system in NYC.

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Nathanael November 11, 2011 - 4:33 pm

City or state law?

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Streetsblog New York City » Today’s Headlines October 28, 2011 - 8:58 am

[…] Q Poll Finds 56 Percent Support Statewide for MTA Payroll Tax (2nd Ave Sagas) […]

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Andrew Smith October 29, 2011 - 5:21 pm

Too late for much conversation but I can offer perfectly rational explanations for politicians who support positions that get trounced in the polls. Anyone who takes it to heart will have a much better understanding of why the world works as it does.

Whether people are for or against something means way less than how intensely they are for or against something. People have opinions on hundreds of topics, but they only get a few votes, so the only opinion that matters, among the hundreds the average person holds, is the one each person feels most passionately about, the one that will get him to cast his vote.

Actually, it gets worse. The vast majority of people support one party or the other so passionately that no position taken by any candidate on any issue will get them to vote for the other party — which means that none of their opinions, on any issue whatever, matter to politicians who want to maximize votes. (The only wrinkle in this is that while they’ll never vote for the other guy, they might stay home, so each party must do a few things to motivate the base, but for the most part, people make themselves politically irrelevant by identifying too much with any party.)

With all this in mind, you can see how it can be very smart for politicians to support ideas with far less overall support than cutting MTA taxes. It might be a brilliant idea to oppose an initiative that’s supported by 90 percent of the public, if a slight majority of undecided voters oppose it.

Even if 90 percent of undecided voters — who, again, are the only voters who matter much — oppose something, it might still make sense to support it, if the 10 percent of undecideds who support it will vote on that issue while the 90 percent who oppose it will mostly vote on other things.

And yet the lazy press continues to write stories about opinion polls as if they should have much bearing on what politicians do, giving no hint to readers about how things actually work. Which is why the press deserves to die the death it’s dying.

I have no idea how the math plays out here, how undecided voters feel about MTA taxes and, more importantly, which side has more people who will vote on that issue alone. But you can be pretty sure that politicians of both parties have a decent idea, even though there’s no way to know such things for sure. And that’s why Republicans are doing what they’re doing.

One more wrinkle: the Republicans may be “pushing” for something that they have no intention of passing. That’s a classic way to motivate the base without actually doing something that will alienate swing voters. But that’s a whole extra layer of the game that I’m not going to get into.

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don December 7, 2011 - 8:02 pm

I own a small biz, I pay this ludicrous tax so MTA workers can retire while I have to work until I am dead. New york loves to pay people to not work,and receive services I have have to pay for. The experiment has failed “Boys in Albany”. The over reaching retirement and benefits for public sector workers in the past 15 years will be impossible to sustain. You will run out of other peoples money. Keep polling the masses, they have no idea who pays taxes. Tell them to pay more for there fare and see how many vote for the increase….
That would be 0%. By the way, I have to pay for my train fare and get screwed paying the tax too. I am not willing to leave this pile of crap to my kids. The politicians who voted YES for this should avoid my neighborhood. Have a Happy and Healthy Holiday.

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