Will Paterson Cave Under Popular Demand To Tax The Rich?

Not even a week ago, Governor David Paterson stood strongly with his proposed budget. It would have drastically cut services, raise more than four billion in excise taxes that includes an 18% non-diet soda charge and leave the wealthiest New Yorkers relatively unscathed. After a few days of being pummeled in the press from groups on the left (and a few on the right), Paterson is rethinking the idea of the millionaire's tax thanks to the many progressive advocacy organizations' hard work.

From NY Times:

Many groups, though, want even more taxes and fewer budget cuts — to protect their members or programs or interests — and are already broadcasting commercials urging the governor to broadly tax the rich in order to avert some of his steep proposed education and health care cuts. And Mr. Paterson seems to be edging closer to acknowledging that he may have no choice but to do so.

“Taxing the wealthy is probably going to be part of the solution if the deficit gets any worse, and all indications are that it probably will,” Mr. Paterson said during a wide-ranging conversation late last week. “If the deficit starts to grow again, then we’re out of moves. I’ve cut as much as I could.”

The governor said that increasing taxes on the rich should be “the last place you want to go, because it automatically kicks in less job creation and leads to people leaving the state, but that risk could become a reality if we have further deficit problems.”

Actually, the last place you'd want to go is to penalize the poor for the problems caused primarily by a few extra greedy members of the elite. Those cuts and excise taxes hurts the economy most of all because it affects so many people that struggle to get by. Also, most jobs are created by small businesses and their wealth doesn't even come close to the executives of corporations that loved credit default swaps so much in order to increase that seven-figure Christmas bonus.

The rich, meaning those that make a million or more a year need to be paying their fair share. Not only that, perhaps we can add an excise tax to Wall Street, say a penny or two per trade? That would go much further to solving our fiscal crisis than taking away large chunks of Medicare, Medicaid and hundreds of millions that are invested in or children's education each year.