She argued that a tax hike would lead high-income individuals move to other states, like Florida, that don’t have state income taxes.
ALBANY – As he seeks to fend off an aggressive primary challenge from Cynthia Nixon this year, Gov. Andrew Cuomo isn’t bragging about tax cuts, as he did when he sought a second term four years ago. But, unlike his opponent, he is ignoring loud calls from progressives in his party to raise taxes for improvements to subway service or to increase education spending – priorities of the state’s institutional left.
The winner of this year’s gubernatorial race will have the strongest hand in deciding what to do about the millionaire’s tax, a levy of 8.82 percent on income over $1 million that brings in about $4.5 billion a year and is set to fall to 6.85 percent in 2020.
Nixon says she would increase the top tax rates, and, like Democrats who dominate the Assembly, she would add new brackets on even higher income bands. Cuomo, whose spokespeople would not give a clear answer about whether he will attempt to renew the millionaire’s tax if he is reelected, has mocked Nixon’s plan.
“I get it . it’s a great slogan and it polls very high because the only people who are against it are the millionaires and it sounds great – sock it to the rich,” Cuomo said last week on NY1. “It’s the answer to everything plus the common cold. The only problem is it’s a non-starter with the Legislature. . If you don’t have to deal with facts, you don’t have to deal with facts.”
While it’s not direct opposition, it’s a method of projection for a governor and possible presidential candidate who has touted his record as a fiscal centrist and has won the support of many in the finance, real estate and business sectors. He has been endorsed twice by the Business Council of New York State.
Nixon recently said that “with the correct leadership out of Albany, we can pass a millionaire’s tax.” She told reporters at the Fort Orange Club that a tax-hike package could pass if Democrats take control of the state Senate this fall. Her campaign said Cuomo “cannot afford to upset his donors so he is eager to make a popular policy look unfeasible. That’s not how states should be governed.”
But at least two Democratic state senators have expressed reservations about raising taxes. State Sen. John Brooks told POLITICO that because of deductibility limits in the new federal tax law, the state was "not in a position [to be] entertaining any additional taxes.” State Sen. Diane Savino told the Daily News that she didn’t want to raise taxes because she feared marginal members like Brooks would lose their seats. She called a tax hike plan “the fastest route to the minority.”
Cuomo has not said whether he would push to renew the millionaire’s tax next year, but did attempt in budget negotiations last year to extend it through the end of 2020. It was extended until New Year’s Eve, 2019.
"We’re proud of the fact that under this administration, New York has adopted one of the most progressive tax codes in the nation and we will discuss future tax rates with the future Legislature as part of overall budget discussions,” said Cuomo spokesman Rich Azzopardi.
Dutchess County Executive Marc Molinaro, the Republican standard bearer, said in a recent radio interview that he would let the millionaire’s tax expire. His campaign has promised that a more detailed tax plan is forthcoming.
E.J. McMahon, president of the fiscally conservative Empire Center, said Cuomo has “had it both ways” on taxes. He opposed renewing the millionaire’s tax in 2010 but then “flipped” in the era of Occupy Wall Street, spinning its renewal as a tax cut (that drew near-unanimous GOP support) because it was coupled with a slight reduction in the top rate and a middle-class tax reduction.
Business Council president Heather Briccetti said that Cuomo has a “very mixed” record on taxes. She noted the elimination of the state’s dedicated bank tax and a roll back of manufacturing and estate taxes
She argued that a tax hike would lead high-income individuals move to other states, like Florida, that don’t have state income taxes.
“New York has the most progressive tax structure in the country already,” Briccetti said. “If you are a high earner we would like you to stay here, so making the state so unaffordable or uncomfortable for people of high income is a really bad idea. This is a very small pool of people and they support a lot of government.”
Michael Kink, executive director of a coalition of labor unions called Strong Economy for All, said the number of millionaires in the state has increased since the higher tax took effect. (McMahon notes that more high-income people, though, are paying taxes as non-residents, and therefore shielding non-wage income – which is often substantial – from New York taxes.)
Kink also said Cuomo would benefit politically – particularly in a primary – if he pushed for higher taxes. A Siena Research Institute poll last March showed that 80 percent of New Yorkers supported renewing the millionaire’s tax.
“I don’t think he’s dug in sufficiently. There have been years when he was willing to do it, there have been years when he was AWOL,” said Kink. “If he wants to be a national progressive leader, the governor should fight hard for more taxes on rich people and a more progressive and fair tax system.”
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