Thursday, March 19, 2009

Bloomberg Won't Leave NY With A Fair Tax And Neither Will His Rich Friends

Mayor Bloomberg and all the other wealthy people in this state are not going to get up and leave if we make the state income tax progressive. Raising the rate for those that earn in the top 3-4% is not going to cause a mass exodus of the elite class and they know it. However, Mayor Bloomberg continues to make that fearmongering argument and so do his not-as-rich apologist allies like Governor Paterson and Majority Leader Smith. It is time to let that talking point go, and allow the rich to pay their fair share of this budget deficit. Simply put, the facts on the ground do not match the political rhetoric we hear from the mayor and the governor.

From The NY Times:

“At the level we’re talking about, there’s no quantitative evidence that it affects the mobility decisions of affluent taxpayers,” said Douglas S. Massey, a demographer at Princeton University and president of the American Academy of Political and Social Science.

Pressured by enormous budget deficits, officials in Illinois, Hawaii, Wisconsin and New Jersey are considering new taxes on the rich. Lawmakers in Albany have discussed several proposals, including increases for those earning more than $250,000.

But even experts who oppose such taxes on other grounds — out of fear that they will retard economic growth and innovation, or encourage lawmakers to indulge in bouts of new spending — concede that there is not much evidence that raising taxes on the wealthy would drive out a significant number.
For example, one state that has raised taxes on the rich has been the very-affluent New Jersey. Let's see what has been going on there shall we?

New Jersey raised taxes on the wealthy in 2004, increasing by 2.6 percent the tax rate levied on those making more than $500,000 a year; and Gov. Jon S. Corzine this month proposed a new increase on high earners.

But a study by Professor Massey and two colleagues, published in September, estimated that the previous tax increase cost New Jersey only 50 to 350 existing “half-millionaire” households — a relatively small number against the total of 44,000 such households in the state.
And the benefits in terms of revenue have netted the Garden State more than $850 million a year.

The reality is that if any class is leaving the city in droves, it is the working class. Studies have shown that those that earn around the median salary or below are moving outside the city so they can afford a livelihood. The fair share plan will help stem that tide by shifting the economic burden so that it isn't completely laid on the backs of the poor.