Read my lips: No new taxes—and that includes levies on wealthy New Yorkers, Gov. Cuomo vowed yesterday.
Cuomo said he was against extending a “temporary” income-taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. surcharge imposed on high-income earners in 2009 and set to expire at the end of 2011, despite having to close a massive $10 billion budget gap.
Cuomo indicated that renewing the surcharge would amount to a tax hike, which would violate his campaign pledge not to boost taxes.
“The old way of solving the problem was continuing to raise taxes on people, and we just can’t do that anymore. The working families of New York cannot afford tax increases. The answer is going to have to be that we’re going to have to reduce government spending,” he said.
Democrats often exclude higher-income earners when they invoke the phrase “working families” during tax-policy discussions.
But Cuomo said working families includes higher-income earners.
“They work, too,” he said, noting that his opposition to tax hikes is “across the board.”
“My point is: What has been the knee-jerk response in New York? ‘Well, expenses will continue to go up, but we’ll raise taxes.’ Those days are over.”
As we have written before, high-income-earner state taxes, including millionaire’s taxes, in New York and other states are poor tax policy for several reasons. They can be unreliable revenue raisers since the income of wealthy taxpayers is often volatile due to stock market fluctuations. The wealthy can also easily move to another state if they strongly oppose the tax system in one state, as Maryland discovered.
In addition, a very high tax rate imposed on a small group of taxpayers is not what a fair tax code should aim for. Targeting a small group of wealthy taxpayers every time a state has a budget shortfall—and assuming they have endless pockets and endless tolerance for high rates—is not the responsible way to pay for government. (And these high state rates are on top of an already progressive federal income tax.)Share