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Liu hopes tax reform will shrink income disparity

TimesLedger Newspapers

City Comptroller John Liu believes the city’s cavernous income gap can be tackled through tax reform and a minimum wage increase, he told TimesLedger Newspapers in a recent interview at its offices.

Liu has not formally declared his intentions for Gracie Mansion, but has raised more than $3 million for the widely expected run. City Council Speaker Christine Quinn (D-Manhattan) also remains undeclared, though city Public Advocate Bill de Blasio and former Comptroller Bill Thompson have officially announced their candidacies.

“I do believe that change is in order,” said Liu, who served as a Flushing councilman before he was elected to citywide office in 2009. “We have a problem that is only getting worse in terms of the economic divide.”

And that economic divide can be bridged by making the city’s income tax more progressive and by raising the minimum wage to $11.50, he said.

City taxes, levied by the state Department of Taxation and Finance, are not exactly flat, but the biggest income bracket indicates that a single person making $50,000 is taxed the same as a person making $500,000. Liu proposes to raise income taxes by 1 percent for the top 1 percent of income earners in the city.

“That actually would afford the other 99 percent of taxpayers in New York City a tax reduction,” he said.

And putting money into the pockets of the middle class means more money will be spent in the local economy, he said.

Liu also hopes to close some loopholes that allow big corporations to pay less in taxes and instead give tax breaks to small businesses.

Mayor Michael Bloomberg contends rasing taxes would drive corporations and the wealthy out of the city, according to Liu, who rejected that premise.

“At the end of the day, New York City is not a commodity. It is special,” he said.

He also supports an $11.50 minimum wage, which he said translates to an annual salary of $24,000 — the amount the city has said is necessary for a wage earner to support two children and stay out of poverty.

As to how the city’s children have been educated under the current mayor, Liu gives the Bloomberg mixed marks, although he would not overhaul the system of mayoral control enacted in 2002, which effectively dissolved the old school board.

Liu would peg fewer outcomes — funding, evaluations, school closings for example — to test scores, a practice the comptroller said has been a trend in the current administration and has created a “factory mentality” in the city’s classrooms.

“The mayor and the [city Department of Education] need to trust teachers to do their jobs,” he said.

One area where Liu and the mayor agree is on coastal development. Liu believes the city needs to reclaim its coastline, but in the wake of Superstorm Sandy, to do so more intelligently.

“I think we should stay the course,” Liu said of the mayor’s efforts to encourage building along the shore. “We’ve lost track of our waterways.”

In the wake of the storm, Liu said he was open to exploring unprecedented infrastructure improvements such as storm barriers in New York City’s harbor that would block rising water levels associated with weather events, though it has been estimated to come with a roughly $10 billion price tag.

“The question becomes not so much can we afford such a storm barrier system,” he said, “but can we afford to not have such a system.”

Bloomberg is asking for nearly $10 billion in aid for the city as a result of the storm’s damage.

Liu’s aspirations for citywide office have also been dogged by a federal court case. Two campaign workers are currently facing charges of wire fraud in Brooklyn federal court. The trial for Jia “Jenny” Hou and Xing Wu “Oliver” Pan, who are each accused of wire fraud, is set to begin next week.

The comptroller has not been charged with any wrongdoing.

Liu said it does not keep him up at night. His campaign recently send out a birthday invitation reading “‘Embattled’ Comptroller John Liu would like to invite you as a guest to his birthday fund-raiser tonight.”

Liu criticized some of the media coverage and said he is proud of the way his campaign has been run thus far.

Reach reporter Joe Anuta by e-mail at januta@cnglocal.com or by phone at 718-260-4566.

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