(The Center Square) – As New York legislators push for a wealth tax in an attempt to reduce the budget cut, a policy expert cautions it may push multimillionaires and billionaires out of the state.
“I think it’s very important for policymakers to be cognizant that New York’s competitive advantage is not guaranteed, in that particularly wealthy people make decisions based on the impact of their bottom lines,” David Friedfel, director of state studies for the Citizens Budget Commission, recently told The Times Union of Albany. “They may choose to leave New York and take all their income with them.”
Lawmakers argue increasing taxes on the wealthy and taxing their second homes in the New York City could reduce Gov. Cuomo’s proposed $10 billion budget cut in education and health care.
“Over 85 state legislators, good government groups, and the most powerful labor unions in our state are united in saying no cuts without raising new revenue from those who can afford to pay,” Harvey Epstein, D-Manhattan, recently told Kings County Politics. “Now, as our state starts on the road to recovery, we must raise revenue from the growing number of billionaires in our state, up from 112 to 118 since the beginning of these intertwined public health and economic crises.”
A Citizens Budget Commissions report found that New York City already has the second highest personal income tax in the nation. In contrast, Florida has no income or wealth tax, and its revenues from the capital gains tax increased by 52 percent from 2010 to 2017, whereas that revenue decreased by 20 percent in New York.
“It could be indicative of residency changing and more of those capital gains growing elsewhere throughout the country as opposed to New York,” Friedfel said.