In a letter addressed to acting commissioner Jamie Woodward of the New York State Department of Taxation and Finance, Assemblyman William Colton (D-Brooklyn) demanded that the state do everything in it's power to recoup as much as it can from a $1.22 billion delinquent tax bill piled up by former Wall Street giant Lehman Brothers Holdings, Inc. The now defunct entity collapsed in late 2008 leading to a cascade of devastating bankruptcies that pushed the U.S. to the brink of a second depression.
Assemblyman Colton's demands come on the eve of one of the largest bankruptcy settlements in history as Lehman Brothers attempts to settle with hundreds of creditors. "New York tax payers deserve to be seated first at the settlement table," declared Colton, who is a member of the state's powerful Ways and Means committee. The company is also believed to be delinquent in New York City taxes to the likes of $600 million.
Colton believes that recouping Lehman's exorbitant tax bills can possibly offset some devastating cuts being proposed in the current New York budget, which faces a $9 billion plus deficit. "If companies like Lehman Brothers always paid their fair share, then the shape of the budget might have looked a lot different than it does today." Under the discussed settlement negotiations underway, Lehman is considering to pay back anywhere from between 25 to 44 cents of every dollar it owes to creditors. New York State stands to gain close to half a billion dollars under those terms.
It is for that reason Colton is feverishly urging the tax department to collect what is rightfully owed to the taxpayers of New York. "While the state is talking about laying off workers, closing hospitals, and cutting money to education, this delinquent revenue can make a tremendous difference,” declared Colton. “Those affected by the state's proposed cuts have 1.2 billion reasons to be outraged," he added.
Just this past March, Colton was successful in urging the tax department to post the top 250 tax delinquent businesses and individuals on the department's website. It is estimated by the tax department that there is over $14 billion in uncollected delinquent revenue owed to New York. Similar efforts to expose tax cheats in other states have yielded hundreds of millions of dollars to close budget shortfalls.