The Wall Street Journal has issued an opinion piece warning that a recent proposal (from New York Democrats) to raise taxes on high income earners as a way to counter budget cuts that resulted from a massive influx of migrants will not work. Amongst the 20 or so politicians supporting the proposal was Representative Alexandria Ocasio-Cortez. WSJ argued, however, that the plan would only inspire high-income earners to leave the state while the legislators “run out of other people’s money.”
The Democrats defended their proposal. “The vast majority of us have felt the strain of rising prices from the grocery aisle to the housing market. Meanwhile, the richest New Yorkers have grown their wealth since the pandemic, and it’s past time they pay their fair share,” the New York City Democrats Socialists said.
Criticizing the Plan AOC and Democrats are Pushing
Naturally, the proposal faced some pushback. From the right and elsewhere. Tim Hoefer, the president of Empire Center for Public Policy, a non-partisan think tank, claimed in the WSJ op-ed that AOC was trying to “redefine” who qualified as “rich” in New York.
Hoefer pointed out that the top five percent of income earners in New York (who would be responsible under the new plan for increased taxes) meant individuals making over $127,000, or married couples making over $250,000.
“The top 1% of New Yorkers begins just south of $1 million in adjusted gross income,” Hoefer wrote. “But the top 5% being a little above $250,000 – translating into married couples making $127,000 each.”
Hoefer argued that top earners in New York were already responsible for 46 percent of state income tax liability. If the proposal were adopted, the top earners would then be responsible for 64 percent of state income tax liability.
“New York already has one of the highest income tax rates in the nation,” Fox reported. “Several studies have found the blue states impose the most burdensome taxes on its residents, with 15.9 percent of net product in the state going to state and local taxes.”
Hoefer also pointed out that the proposal would raise taxes on government employees.
“More than 168,000 New York state and local government employees were paid more than $127,000 last year. Forty-five New York school districts paid most of their teachers and administrators at least that much, and about 70 police or fire departments had mean pay above that line,” Hoefer wrote. “The move from targeting the top 1% to the top 5% is a recognition that the socialist program, to borrow from Margaret Thatcher, risks running out of other people’s money.” (Note: I’m not sure raising taxes on the top five percent of income earners qualifies as a “socialist program.”)
Hoefer is concerned that any increase in taxes will inspire wealthy New Yorkers to pull up stakes and go somewhere else. Florida perhaps, which has a relatively relaxed tax scheme. Hoefer’s concerns are valid. New York (and California) “experienced the largest loss of tax income from migration of any states in the country,” a recent study found. Where are the tax refugees moving? To red states like Texas and Florida.
Harrison Kass is the Senior Editor and opinion writer at 19FortyFive. An attorney, pilot, guitarist, and minor pro hockey player, Harrison joined the US Air Force as a Pilot Trainee but was medically discharged. Harrison holds a BA from Lake Forest College, a JD from the University of Oregon, and an MA from New York University. Harrison listens to Dokken.
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