Author

This Note explores the regulatory role of tax policy in New York City and argues
that the City’s power to tax independently should be increased. Currently, New
York City must seek permission from the New York State Legislature to impose
new taxes or change the structure of existing taxes. This restriction is justified primarily
by the revenue-raising function of tax policy—an analysis that ignores the
important role tax policy plays in creating effective regulatory regimes. The first
Part of this Note sorts out the tangled relationship between fiscal policy tools such
as taxation, regulation, user fees, and spending, and suggests factors relevant to
determining which tool is most appropriate to use in a given situation. The Note
next discusses New York State’s scheme for distributing authority over taxation and
regulation, and provides an overview of local government law. The concluding Part
of this Note argues that New York City should be given more independent taxing
authority and directly addresses arguments against the granting of greater municipal
taxing power.

Cities are once again on the rise and have become the site of major public debates, from income inequality and immigration policy to where and how Americans should live. While municipal leaders are often eager to fill the void in political leadership left by Congress and state elected officials, they are often hamstrung by state home rule laws, which define the powers states grant to municipalities. These laws limit, among other things, municipal taxing authority. Recently, local government scholars have wrestled with whether and how to grant municipalities more fiscal authority, but such scholarship has not provided a unified theory of municipal taxing authority.

This Article considers in detail whether and how to expand city taxing authority. It argues that state law should grant municipal governments “presumptive taxing authority.” This presumptive taxing authority would parallel municipal regulatory authority and be similarly subject to state preemption law. Such reform would open the door to more municipal revenue innovation, while ensuring that the state can vindicate its weighty policy interests.