As New York Gov. Andrew Cuomo defends his proposed state budget for the coming fiscal year, a debate is brewing over whether the governor should extend an income tax increase, dubbed the “millionaire’s tax,” on the wealthiest New Yorkers.
This tax hike, which, despite its name, would affect individuals earning over $200,000 a year and couples making over $300,000, has garnered considerable interest in the wake of criticism over the governor’s proposal to slash funding for Medicaid, education and state operations.
Proponents such as New York Assembly Speaker Sheldon Silver, argue that an extension of the tax would raise upwards of $700 million more in revenue than the governor’s current proposal. Opponents, including Gov. Cuomo and New York City Mayor Michael Bloomberg, suggest the millionaire’s tax would drive New York’s entrepreneurs and job-creators out of the state.
For New Paltz residents, already entrenched in the budget debate as Gov. Cuomo stands by his proposed cuts to SUNY, the millionaire’s tax is sparking ample discussion. After all, the governor’s proposed SUNY cuts are poised to provide the state with $400 million in added revenue. In its original form, the proposed tax hike would generate nearly twice that amount.
John Bonacic, a Republican who represents New Paltz in the State Senate, has broken ranks with the New York GOP, who almost unanimously oppose such a tax increase. Bonacic has proposed his own modified version of a millionaire’s tax, which, unlike the tax in its original form, would apply to only those earning over $1 million a year. His version would raise roughly the same in revenue as the original millionaire’s tax. Republican Senate leader Dean Skelos, however, opposes any form of this tax, including Bonacic’s, and has stated that, given the divisiveness over the issue, a millionaire’s tax is probably going nowhere.
Local political activists are divided over whether Gov. Cuomo, who campaigned on balancing the state budget without a single tax hike, should push for a millionaire’s tax.
“I’m opposed to a millionaire’s tax, because taxing people who are successful and who are the spenders and job creators is totally illogical,” said Robin Yess, chairwoman of the Ulster County Republican Committee. “What we need are cuts and, of course, the mindset is always ‘hey, don’t cut my stuff.’”
Guy Kempe, chair of the Mid-Hudson Valley Working Families Party, on the other hand, is whole-heartedly on board with a millionaire’s tax.
“It’s simply irresponsible to give wealthy New Yorkers a tax break when the state’s facing a $10 billion deficit,” said Kempe. “Cuomo’s proposed budget relies too heavily on tax cuts and these cuts will increase unemployment and intensify the hardship for those struggling with the brunt of this recession.”
Others, such as Ulster County Legislator Hector Rodriguez, are conflicted over a tax increase on the wealthy.
“The short and easy answer is yes, of course those with more means should be able to shoulder more of the burden,” said Rodriguez. “Yet, at the same time, we need to keep the entrepreneurs in our communities in New York. We can’t tax these residents out of the state.”
A poll, conducted in February by the Marist Institute for Public Opinion, found 64 percent of New Yorkers in favor of extending the millionaire’s tax, with 33 percent opposed. Majorities of Democrats, Independents and Republicans gave the proposal a thumbs-up.