Gold Bars, Private Jets and Racehorses: My Investigation into Tax Loopholes and Carve-Outs in New York
Our top priority should be making life easier, safer, and more affordable for New York families. But when our state budget budget includes loopholes and carve-outs, everyday New Yorkers end up paying the price.
I’ve published a new report identifying nearly $3 billion in questionable, arbitrary and downright absurd state tax expenditures on everything from gold bars to private jets to frat houses.
The report, titled A $3 Billion Hole in Our Pocket: A Select Review of Tax Expenditures in New York State Tax Law, is meant to start a robust debate on how to create a more effective, transparent and equitable tax system that meets the needs of New York families and funds programs to address the cost-of-living crisis
Mu report highlights several long-standing tax exemptions and carve-outs that cost New York $2.836 billion in lost revenue while providing little obvious public benefit. Here are a few examples:
New York forgoes a stunning $601 million in taxes by exempting the sale of precious metal bullion (i.e. gold bars and coins) from sales tax, as long as the sale exceeds $1,000.
New York spends $23 million a year to exempt dues and initiation fees paid to fraternities from the sales tax—despite charging sales tax on similar fees such as those for social or athletic clubs.
New York takes a $6 million hit by exempting maintenance performed on private jets from sales tax, despite taxing other types of maintenance like car repair.
New York loses $6 million by exempting purchases of racehorses from sales and compensating use tax, so long as they are being used for horse betting.
Tax exemptions on charitable deductions cost the state over $860 million in 2024, largely subsidizing the wealthy for giving to charity at the expense of funding public services that could make such charity unnecessary.
My report, which draws on 2024 revenue estimates from the state's Department of Taxation and Finance, highlights the importance of carefully evaluating New York State's tax expenditures to ensure they align with the state's fiscal needs. It finds that “while tax expenditures are frequently meant to provide economic incentive and relief, when not continually refined they have the potential to subsidize economic activities and wealth that require little incentive while depriving the state of billions of dollars of revenue.”
Instead of tax breaks for special interests, this money could fund anti-poverty proposals like my Working Families Tax Credit, which would give working-class and middle-class families extra support for essentials like groceries, rent and clothing. My plan would slash child poverty by nearly 17% and cut deep child poverty by 22.0%, and would increase the net income of more than a third of all New York residents.
““Each year, New York State gives away billions of dollars in tax breaks that benefit the wealthy... This report highlights some of the most egregious policy failures in the state tax law, and should serve as a guide for legislators who are committed to a strong and fair tax base – especially at a time of acute need for investment in public transit, housing, childcare, and other affordability measures.””