Bay Ridge business owners like Cuomo’s tax cut proposal

January 20, 2015 By Paula Katinas Brooklyn Daily Eagle

Bob Howe, president of the Merchants of Third Avenue, says he likes the proposed tax cut, but is concerned that costs will increase in other ways. Eagle photo by Paula Katinas

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Owners of small, mom and pop-type businesses in Bay Ridge expressed cautious optimism about Governor Andrew Cuomo’s new proposal to lower their taxes.

Bob Howe, a lawyer who serves as president of the Merchants of Third Avenue, a group representing store owners on the avenue between 65th and 100th streets, said the plan Cuomo announced on Jan. 18 to lower the tax rate from 6.5 percent to 2.5 percent over three years sounded good to him. “It would lower our overhead. I’m in favor of anything that would allow an entrepreneur to create a business. Small businesses are the job creators in our communities,” he told the Brooklyn Eagle.

But Howe also expressed concern that the proposed tax cut would not wind up saving money for business owners because costs in other areas would rise.

“Between medical insurance requirements and increases in the minimum wage, the cost of doing business goes up. The government takes away with one hand and adds something in the other hand,” he said.

Under Cuomo’s plan, small business tax rates in New York State would sink to their lowest rate ever. The tax cut would be phased in over a three-year period; starting off with a 3.25 percent rate for tax year 2016, to 2.9 percent for tax year 2017 and to 2.5 percent for subsequent tax years beginning in 2018. In a statement, Cuomo predicted the tax cut would provide $32 million in relief fro small businesses.

“Small businesses are the engine of opportunity and we will do everything we can to ensure they thrive and grow in New York,” Cuomo said.

For the purpose of the tax cut, the definition of “small business” is a business with less than 100 employees and having a net income less than $390,000.

Justin Brannan, co-owner of the Art Room, a gallery-school on Third Avenue, said he loves the governor’s idea.

“Owning a small business is a lot of fun but it’s also very much a labor of love,” he wrote in an email to the Eagle. “For many people, starting their own business is often a lifelong dream but taking those initial steps can be incredibly daunting, so it is refreshing to have people like Governor Cuomo and Mayor de Blasio who recognize that small businesses are truly the lifeblood of our local and national economy. And I think I speak for all my fellow small business owners when I say: any relief for a small business is a much welcomed relief.”

John Abi-Habib, owner of MSI Net Inc., a Bay Ridge-based company that assists businesses and schools in maintaining their Internet services, said the tax cut is a great idea, but that business owners need more help than that.

“There are pluses and minuses,” he told the Eagle. “The tax cut is nice, but fees are high. Every time you file for something, there is a fee, sometimes as much as $200.00. Other states don’t have filing fees. There is also a franchise tax that businesses pay.” Abi-Habib suggested that the governor look at ways to lower business costs across the board.

There were signs that the governor’s tax cut plan was gaining borough-wide support.

Carlo Scissura, president and CEO of the Brooklyn Chamber of Commerce, endorsed the Cuomo plan.

“Small businesses in New York face countless obstacles on the road to success, but Governor Cuomo just opened a huge shortcut for them,” said Scissura. The chamber’s members include hundreds of small businesses.

***UPDATE***

Article was updated to include comments from John Abi-Habib.