There’s a battle shaping up in Albany between Gov. Cuomo, who wants to lower taxes and even eliminate some, and Mayor de Blasio, who wants the state to raise taxes on city residents earning more than $500,000 a year.
While de Blasio wants to use new revenue for a worthy cause, universal prekindergarten classes for all 4-year-olds in the city, it’s Cuomo who’s got the right idea.
It’s easy to say “tax the rich,” and there are instances in which marginally raising rates on high earners is indeed the best choice. We supported, for example, President Obama’s initiative to raise rates on those earning more than $400,000 from the Bush-era 35 percent to the 39.6 percent that had been in effect previously.
But there are a number of reasons why that was the correct policy and why de Blasio’s plan is not.
For one, the federal government was facing massive deficits, which Obama and Congress have since reduced. The city and state, in contrast, have balanced budgets, as they must under the law. The state even has a surplus of around $2 billion. Also, people are known to leave high-tax states and move to low-tax states, which is one of the prime reasons Florida is about to surpass New York in population. (Or someone might just move from, say, Douglaston to Great Neck to avoid the city income tax altogether.) Far fewer people would be willing to leave the country because of a small tax hike. And, as Cuomo is glad to point out, it’s about time New York once again became an engine for economic growth. Just like us, he’s tired of hearing that ours is one of the least business-friendly states in the nation, as every study says it is — because of high taxes and overregulation.
Cuomo wants to cut taxes on businesses and the estates of the deceased while giving a new tax credit to renters, who indirectly pay the property taxes levied on their landlords. He’d also freeze property taxes outside the city, where they’ve been skyrocketing for years. All these measures would return about $2 billion to the public — just the amount of the surplus, which is no accident. The governor previously had provided a tax break to certain businesses that opened up shop on or near college campuses, in an effort to boost not just the general economy but the tech industry.
Cuomo said he would rather find money in the state budget to provide universal pre-K than to raise taxes. That’s when de Blasio revealed his true colors — saying he wants a tax hike whether the state funds early childhood education or not.
That would be a mistake. Universal pre-K is worth establishing, but it should be done with existing revenue rather than new taxes. And we doubt de Blasio could convince Cuomo otherwise anyway.