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A Project of The Annenberg Public Policy Center

Giuliani’s Tax Puffery

Former NYC mayor takes credit for too many tax cuts.


A new radio ad boasts that Rudy Giuliani “cut or eliminated 23 taxes” while mayor of New York City, a boast he and his supporters have repeated many times on the campaign trail. We find that to be an overstatement. Giuliani can properly claim credit for initiating only 14 of those cuts.

In fact, he strongly opposed one of the largest cuts for which he claims credit, reversing himself only after a five-month standoff with the city council. In addition, the ad’s claim that Giuliani turned the budget deficit he inherited into a surplus, while true enough, ignores the fact that he also left a multibillion-dollar deficit for his successor, not including costs associated with 9/11.

Update, July 31: After our article appeared, the New York Daily News ran a similar article stating that the former mayor “is seizing credit for cuts initiated by others.” In an interview posted on YouTube, the mayor said he deserves credit for tax cuts he supported, whether he initiated them or not.


For months, Republican presidential contender Giuliani has been touting the tax cuts that occurred while he was mayor of New York City from 1994 to the end of 2001. Taxes, he has said, are right up there with the war on terror as his top priorities for the nation, and he’s eager to prove his bona fides. “New York City has taxes you never heard of. New York City taxes air,” he recently told an audience in Savannah, Ga., drawing scattered laughter. “While I was mayor I lowered 23 or eliminated 23 different taxes…. I lowered them, I lowered them dramatically.”

Giuliani Radio Ad: ‘Out of Control’

Giuliani: Every promise I’ve made, running as mayor of New York, they said couldn’t be done.
They said I couldn’t cut crime, New York City was the crime capital of America. Couldn’t be done.

Narrator: Under Rudy Giuliani’s leadership, crime in New York City drops 56 percent.

Giuliani: New York City was the welfare capital of America, 1.1 million people on welfare. You can’t cut welfare, can’t be done.

Narrator: Welfare rolls went down by a staggering 58 percent.

Giuliani: They said we couldn’t reduce taxes in New York. They said you couldn’t get control of spending. That’s impossible.

Narrator: Rudy Giuliani turned a 2.3 billion deficit into a multibillion-dollar surplus and cut or eliminated 23 taxes.

Giuliani: My focus when I ran for mayor of New York City was on the future, and it will be in this campaign. Leadership is about what we can do, what we can accomplish, never taking no for an answer. This is all about how America can grow, how America can get stronger, how America can be the country that realizes all the potential that we know we have.

Narrator: Paid for by Giuliani Presidential Committee Inc. Visit joinRudy2008.com

Giuliani: I’m Rudy Giuliani and I approve this message.
 Some of his supporters have repeated the claim. In April, when magazine publisher Steve Forbes endorsed Giuliani in his magazine, he noted prominently that “Giuliani cut or eliminated 23 taxes.”

And it’s a claim featured in one of Giuliani’s new radio ads, which began airing this week in Iowa and New Hampshire.

Bad Credit

We don’t dispute that all 23 cuts happened while Giuliani was mayor. But by saying “I lowered them,” he takes personal credit for eight cuts that were initiated not by him but by the state, according to the city’s Independent Budget Office, a publicly funded, nonpartisan watchdog agency that puts out highly regarded budget analyses. A ninth tax cut was pushed by the city council. Giuliani’s list includes a new college tuition deduction, a cut in the marriage penalty, and sales tax exemptions for certain activities and equipment. According to George Sweeting, the IBO’s deputy director, “These were all driven by state policy.”

We’ll stipulate that these things are rarely black and white. It’s possible, and in many cases extremely likely, that the governor’s office or key state legislators consulted with the city about various tax proposals. But we judged the IBO to be the most reliable independent arbiter of which initiatives came from the city and which were from the state. Each year the IBO compiles just such a list, drawing from the mayor’s annual budget proposal, which includes tax proposals, and other documents.

Two of the cuts originating in the capital were from a state program designed to relieve taxpayers of part of the burden of funding public schools. Giuliani’s campaign team told FactCheck that the mayor successfully lobbied to broaden the state’s proposed property tax cut so it applied to owner-occupied co-ops, which was advantageous to city residents. That may be; we found one newspaper article that backs up the claim. Even so, the program was state-initiated. Giuliani’s advisers also told us that it was the mayor who pushed to create a similar, smaller program that provided an income tax break, but we found no independent support of that claim.

According to Giuliani’s team, the college tuition deduction on his list was something he was able to get added on to a similar state program. But it does not appear on the IBO’s accounting of tax proposals by the city. And Sweeting says he’s aware of no add-on for the city. “The city’s itemized deduction matches the state’s itemized deduction,” he said.

Eight cuts on Giuliani’s list that actually came from Albany

  • A new college tuition deduction/credit
  • A sales tax exemption for utility transmission and distribution
  • A sales tax exemption on Web hosting and HDTV equipment
  • A reduction in taxes on bank mutual fund companies
  • A cut in the marriage penalty
  • A group of miscellaneous sales tax exemptions
  • School Tax Relief, or STAR, a rebate for a portion of property taxes paid
  • Another STAR program, this one applied to income taxes

Source: NYC Independent Budget Office

Giuliani’s side maintains that sales tax exemptions for what the campaign lists as “utility transmission and distribution” and “web hosting and HDTV equipment” were suggested by a new-media task force the mayor put together to try to keep the high-tech industry from leaving New York. But, once again, those exemptions do not appear on the list of city-initiated tax proposals during Giuliani’s tenure. “These were enacted as state changes and applied statewide,” said Sweeting.

The same is true, Sweeting said, of reductions in the marriage penalty and taxes on bank mutual fund companies. As for a category the campaign calls “Sales tax – misc. exemptions,” most of those came from the state, though Giuliani’s administration might get partial credit for some.

If You Can’t Beat ‘Em…

Giuliani deserves only partial credit, if that, for one other cut on his list: the ending of a 12.5 percent surcharge on the city’s personal income tax. Early in his administration, Giuliani had proposed getting rid of the surcharge, but he dropped the matter for other priorities. In fact, Giuliani completely changed course, so strongly opposing the expiration of the surcharge that he made late-night phone calls to legislators in Albany in 1996 and 1997 to convince them to keep it, according to news reports. Then, in 1998, the city council pushed hard to end the surcharge. Giuliani was at loggerheads with council members for five months before finally striking a deal and going along with the council’s position, giving city residents their largest tax cut in history. According to an account in The New York Times on Nov. 18, 1998:

NYT: The Mayor said he had stopped resisting the elimination of the income tax surcharge because the surcharge would expire on Dec. 31, and the city could not continue it without the State Legislature’s approval. He said the city would have to make budget cuts during the next few years to make up for the loss of the 12.5 percent surcharge, which was first imposed in 1991 and brings the city $550 million a year in tax revenues.

“My objection to the tax cut was not doing the tax cut,” Mr. Giuliani said in a news conference. “It was the order in which it was done. First you should reduce the spending, then you cut the taxes.”

Giuliani now claims credit for the cut he fought for years.

Credit Where It’s Due

Giuliani exaggerates his record as a tax-cutter, even though he has little need to do so. He initiated and deserves credit for most of the cuts on his list, including a new sales tax exemption for clothing that costs less than $110; lower property taxes for condo and co-op owners; cuts in the tax on “coin-operated amusement devices”; and a reduction of the commercial rent tax, an unusual levy that New York collects from renters of commercial real estate. (In most cities, it’s only the property owners who are taxed.) That last one saved the affected taxpayers more than $2.4 billion between fiscal years 1995 and 2002.

In all, we find the cuts for which Giuliani deserves credit lowered taxes by $5.4 billion during his tenure. If you are inclined to give him credit for ending the 12.5 percent surcharge, even though he fought it, you can increase the dollar figure to $8 billion. Either would be an impressive amount of money. Giuliani, however, claims credit for $9.8 billion worth of cuts. We find that to be a multibillion-dollar bit of puffery.

Also, it’s worth noting that Giuliani’s list doesn’t mention one tax he fought to keep but lost in court. The city had been collecting about $360 million per year from commuters from New Jersey, Connecticut and other parts of New York state.

Overall, did taxpayers in Giuliani’s New York see their tax burden fall? “It’s fair to say the tax burden declined,” said Sweeting. “That was partly because of tax cuts, and partly because incomes were growing.” But no nonpartisan group has done historical calculations that would allow a comparison between 1994 and 2001.

Deficits Coming and Going

Giuliani’s radio ad also asserts that he “turned a 2.3 billion deficit into a multibillion-dollar surplus” in New York. Well, not if you’re comparing what he inherited with what he left, which would be a logical way to look at it. When he took office in 1994, Giuliani was indeed facing a $2.3 billion deficit for the next fiscal year. But Giuliani’s last budget, issued in May 2001 for fiscal 2002, projected a deficit of nearly $2.8 billion in fiscal 2003, the first budget year the new mayor would face. The IBO estimated the deficit would be even larger, about $3.3 billion. In reality, thanks to 9/11, the budget hole turned out to be around $5 billion.The city under Giuliani did run a surplus in some years, but by our accounting this ad’s listeners are being misled.

Update, July 31:The New York Daily News ran a story July 29 under the headline “Critics say Rudy didn’t make as many cuts as he claims,” raising some of the same criticisms as we do here. In addition:

• The News story points out that the income-tax surcharge that Giuliani now claims credit for eliminating was due to expire that year anyway. It quoted Charles Brescher of the Citizens Budget Commission, a nonpartisan budget watchdog group, as saying Giuliani’s claim to that cut isn’t valid. “We don’t consider not raising a tax a tax cut,” Brescher was quoted as saying.

• The News story also noted that Giuliani counts the STAR program twice, once as an income tax component aimed at city renters, and a second time as property tax cut. It further noted that the measure was proposed by then-Gov. George Pataki and was funded entirely by state dollars, not city taxes. “Rudy can’t count STAR at all,” the News quoted Edmund McMahon, a budget expert and senior fellow at The Manhattan Institute, a think-tank friendly to Giuliani. “He does have a tax cutting record, but the mayor was strictly a bystander when it came to STAR.”

(Note: Shortly after this update was posted, McMahon called to say that he now believes Giuliani had some role in the negotiations and that he should have said the former mayor was “a bystander,” rather than saying he was “strictly a bystander.”)

Giuliani continues to insist that he deserves personal credit for all 23 cuts on his list. In a video posted  on YouTube by a conservative blogger, Giuliani is questioned by the author of the Daily News story, David Saltonstall. (Giuliani’s campaign asked us to link to this video as his response to our article. We’re happy to do so. Please note that the pro-Giuliani words superimposed on this video are those of the blogger and not ours.)

The former mayor summed up his position in this exchange:.

Saltonstall: All you have to do is say, ‘I support it,’ and you get credit for it?
Giuliani: Of course. That’s exactly right. Of course.

We continue to disagree with that, as do tax experts quoted by the Daily News.

The former mayor also explained why he believes he deserves credit for the elimination of the income-tax surcharge despite opposing it for five months:

Saltonstall: You argued against the PIT (personal income tax reduction) for several months.
Giuliani: I argued against it while we had a deficit, and then I argued for it as soon as we had a surplus.

Update, Oct. 5: An earlier version of this story included a discrepancy between the number of tax cuts that originated in Albany as listed in our chart and the number in the text of the article. The chart was correct: Eight of the tax cuts were initiated by the state.


Hear Giuliani Radio Ad “Out of Control”

Supporting Documents

View Giuliani’s list of 23 tax cuts


Horsley, Scott. “Giuliani Takes Campaign to Southern States.” National Public Radio, “All Things Considered.” 6 July 2007.

Goodnough, Abby. “Judge upholds and extends commuter tax repeal.” The New York Times 26 June 1999.

Goodnough, Abby. “In budget pact, Giuliani and council drop a tax surcharge.” The New York Times. 18 Nov. 1999.

Weiss, Lois. “Governor adds co-ops to tax plan.” Real Estate Weekly. 19 Feb. 1997.

Purnick, Joyce. “The old world in the schools of New York.” The New York Times. 18 Jan. 1996.

Moses, Paul and Michael Slackman. “Deal to maintain NYPD Size,” (New York) Newsday. 18 Dec. 1996.

Saltonstall, David. “Critics say Rudy didn’t make as many cuts as he claims,” (New York) Daily News. 20 July 2007

Lambert, Doug. “VLog: Rudy defends tax cut claims” (video shot at Rudy Giuliani campaign event, 30 July 2007) GraniteGrok.com. Posted 31 July 2007.