To the editor:

A recent article in your newspaper suggested that the state legislators are considering a new tax on streaming services, as well as an increase in package delivery fee and a surcharge on ride-hailing services, to support MTA infrastructure. It suggested that Gov. Kathy Hochul has proposed raising payroll taxes statewide to generate $700 million, while legislators for upstate New York have suggested a raise on corporate taxes for companies making over $5 million annually.

Never mind the general incoherence of the proposed plan. Never mind the part of the tax burden that upstate New Yorkers would bear for funding MTA, a service they do not benefit from whatsoever. Never mind that streaming services, ride-hailing services and other corporations would ultimately pass down the corporate tax cost to their employees and customers. Never mind that streaming service has no correlation to the MTA.

What concerns me the most is that the governor (the current one or anyone in modern memory), and the legislators have time and again demonstrated that they lack a sound understanding of basic economics, or even the basic premise of fairness, that the beneficiaries of a service should pay for it directly.

MTA is the public transport of New York City, and ideally the MTA revenue should be generated directly by the ticketing fees of the riders of MTA. However, like any state operated enterprise, MTA is not efficient enough to generate enough revenue to sustain itself, without needing tax subsidies. The governor seeks to keep the MTA ticket prices flat, and generate the revenue by burdening New Yorkers, even the ones outside NYC. What happens when the current inefficiencies of the MTA catch up again in a few years, leading to more deficits? Where would the state seek the next bandaid?

Time and again, the inherent wisdom of effective free-market capitalism has been ignored:

1. When a state, often with good intent, interferes in free-markets and runs enterprises, it eventually makes it inefficient and ineffective to the point of deficits, especially if there is no healthy competition that comes from free-markets.

2. When the enterprises the state owns generate deficits, instead of fixing the inefficiencies of the enterprise, the state uses its hands to dip into the pockets of the taxpayer.

3. When the state dips into the pockets of the taxpayers, it always ends up redistributing wealth by creating unfair tax burdens.

4. Finally, the tax burdens almost always reach the common individual, no matter at what higher level (wealthy individuals or corporations, etc) they are imposed.

I suggest Hochul look deeply into the inefficiencies of MTA, and propose a long-term plan to fix it. Furthermore, difficult though it is, the governor can demonstrate more courageous leadership by insisting that NYC pay its own bills. Finally, I encourage the readers to ponder how relevant (1), (2), (3) and (4) are to the nation’s current struggles with Social Security, Medicaid and Medicare deficits at the federal level. Farewell,

Nandan Pai

Plattsburgh