Is New York Finally Ready to Tax the Rich? | Press "Enter" to skip to content

Is New York Finally Ready to Tax the Rich?

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Debunked myths revive themselves. The idea that the rich will move to Key Biscayne if they are not appeased has traction despite the evidence. As the Cornell sociologist Cristobal Young found when he analyzed tax returns from 3.7 million very high earners, filed over 12 years, they largely stay right where they are. Only 2.4 percent of those in his data set moved out of state in any given year. Low-income earners, generally looking for opportunity, were far more likely to migrate.

While editors and architects and others in creative fields may still be decamped in cabins in Maine or Vermont, most major investment houses and real estate firms have had their employees coming to the office for months — a certain percentage of traders have been back on the floor for a while. This should counter the impression that anyone can work from anywhere — that a sustained mass exodus from the city is inevitable.

Of all the various laws put forth, the one that seems to have the greatest support would raise income tax rates in increments beginning with individuals making more than $300,000 (or couples making more than $450,000). Currently, the top marginal tax rate in the state is 8.82 percent. Under the Invest in New York Act, the figure would climb to just over 10 percent for those making $2 million a year, for instance. At the maximum end, those bringing in $100 million or more, the rate would extend to 15 percent.

Last month, Governor Cuomo himself floated the notion of graduated hikes to income tax that would require those in the top bracket to pay 10.82 percent. But whether he actually remains loyal to this idea depends on how much relief the federal government ultimately diverts to New York State. The governor has asked for $15 billion. His budget director has argued that should it come through, there would be no need for the tax increases lawmakers are seeking, which is like saying that now that you have been given mittens in the middle of a snowstorm, there’s no need to fix the hole in the roof.

The advocates who have been fighting for tax reform are hoping to do more than patch up the economic holes left by a public-health crisis. They want to make up for decades of disinvestment in struggling communities, for years of mollycoddling a population wedded to high-priced “watercraft.”

“Joe Biden is going to help state and local governments, and that’s great, but that money goes away in a year,” said Mike Kink, the executive director of Strong Economy for All, a coalition of unions and nonprofit groups that have led the charge for a more equitable tax system.

“We’ve made great progress on cultural issues, on transgender rights, for example. But when it comes to money and resources, that is where you can really make lasting change,’’ he said, “and that is where the rich and powerful put up the biggest, strongest fight.”


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