New York lawmakers are considering raising the taxes for wealthy residents in order to make up for the revenue the state lost during the coronavirus shutdown.
New York Gov. Andrew Cuomo argued that the state should demand additional federal funding before it considers raising taxes, but several state Democrats are pushing for the legislature to follow New Jersey’s example and raise taxes on millionaires.
Such a move could push wealthy New Yorkers—already fleeing due to the excessive cost of living, coronavirus mismanagement and anarchist riots—out of the state at a faster rate, Cuomo warned.
“Before you talk about tax increases in New York City or New York state, let’s first focus on the better options,” Cuomo said during a press conference earlier this month.
The governor previously acknowledged that he had begged some of his 1-percenter friends to return to New York City, even offering to cook for them if they did.
He has repeatedly sought to pin blame for the exodus on the city’s most famous refugee, President Donald Trump, who relocated his permanent residence to Florida in early 2019.
New York’s revenue is set to be $14.5 billion less than it needs to be due to the economic shutdown.
Cuomo has demanded that the federal government help close that gap by providing additional funding, but Congress has been unable to decide whether to give more aid to the states.
A recent analysis by the Justice Department named New York City one of three urban regions—alongside Portland and Seattle—that was providing safe harbor for anarchist rioters in defiance of federal law.
Pro-tax progressives in the state said in a June statement that New York can no longer rely on the federal government.
“We must fight to maximize federal aid to fill New York’s gaping budget gap, but we must also be prepared to raise needed revenue from those who can afford to contribute to our recovery,” wrote the group of more than 100 state lawmakers and labor-union leaders.
“To get through this crisis, we are going to need both massive federal aid and a significant contribution from New York’s most well-heeled residents,” said the statement.
A few of the proposals New York Democrats are considering include raising the top marginal tax rates for millionaires, taxing billionaires’ unrealized capital gains, and/or doing away with rebates for payments of the state’s stock transfer tax.
In New Jersey, Gov. Phil Murphy agreed to raise the tax rate on income between $1 million and $5 million from 8.97% to 10.75%.
New York could adopt a similar tax hike and residents would hardly notice,said New York State Budget Director Robert Mujica, a Cuomo appointee.
“The overwhelming majority of billionaires and millionaires in this state live or work in New York City,” Muijca said.
“The combined state and city income tax rate is already 12.6 percent—which is higher than New Jersey’s new top rate or a proposed 12 percent ‘billionaire/millionaire tax rate,’” he said.
