To the average high-taxed New Yorker, the idea of a raising
taxes on the wealthy may sound appealing. For many Democratic lawmakers in
Albany, it is.
Under their proposal, that tax rate for joint filers with
an income of $2 million would go from 8.82% to 9.85%. For incomes above $5
million annually, the rate would increase to 10.85%.
Families earning above $25 million would pay 11.85%.
Republican lawmakers oppose the idea.
“Taxing the rich sounds good, but the problem is, the rich
leave,” says state Sen. Phil Boyle (R-Bay Shore).
He says increasing taxes on the wealthy often backfires
because they can change their state of residency.
“New York has lost a tremendous amount of millionaires and
billionaires in recent years. They simply move to Florida or some other state,
live there for 6 months...and then we lose all of their income tax,” he says.
But Republicans are outnumbered roughly 2 to 1 in Albany.
And the largest single bloc of lawmakers, city Democrats, strongly support the
hikes.
Assembly Speaker Carl Heastie, of the Bronx, says,
"What we're asking is for those who have done very well to do a little bit
more."
Others argue the wealthy have done a lot. EJ McMahon, of
the Albany-based Empire Center for Public Policy, says the “highest earning 1%
generate 44% of all the taxes paid by state residents.”
“If the Legislature gets the tax increase it wants, I think
we're going to hasten the erosion of our tax base and it won't be long before
the Legislature turns to people who are not millionaires and billionaires,” he
says.
There's roughly 20,000 people in Nassau, Suffolk and
Westchester counties who earn above a million dollars. Rest assured, they will
be paying close attention to what's happening in Albany before a budget is due
on April 1.
The tax hikes would generate about $6 billion in revenue
for the state. Opponents say with the billions New York got from the federal
stimulus plan, it's money not needed right now.