Yves here. IMHO, the bigger deal in this tax proposal is closing the carried interest loophole, which would trim the sails of private equity and hedge fund barons. It’s also striking to see the factually-challenged, knee-jerk reaction from Cuomo on raising taxes on the rich. When I was a young thing in New York, the top marginal rate was 70% and it kicked in at a much lower level, in real income terms, than now. Rich people were still eager to and did live here.
By Julia Conley, staff writer for Common Dreams. Originally published by Common Dreams
Imploring New York Gov. Andrew Cuomo to allow them to contribute to the state’s future in a way that benefits all New Yorkers, four dozen millionaires are demanding that lawmakers pass a “Multi-Millionaires Tax” to raise billions of dollars for education, infrastructure, and other programs for the greater good.
Forty-eight millionaires sent a letter to Cuomo and the New York State Assembly as lawmakers weigh proposals for closing the state’s $2.3 billion deficit—arguing that raising their taxes could provide the state with an additional $2 to 3 billion per year.
“We millionaires and multi-millionaires of New York can easily invest more in the Empire State, and lawmakers like you have a moral and a fiduciary duty to make sure we do so,” wrote the Patriotic Millionaires, including former Blackrock executive Morris Pearl and filmmaker and entertainment heir Abigail Disney.
“The taxes we’re talking about will not affect people’s quality of life. They will not have any fewer private airplanes or boats because of this tax.” —Abigail Disney, Patriotic Millionaires“Raising taxes on high-income New Yorkers like us in order to invest in our people and our communities is not just the right moral choice, it also happens to be in the long-term economic best interest of everyone, including millionaires like us,” they added.
As the letter was delivered to the State Capitol, Pearl testified at a state budget meeting on the Multi-Millionaires Tax proposal.
The tax would be levied against households earning more than $5 million per year, Pearl said. The group is also proposing that lawmakers close the carried interest tax loophole, which allows many Wall Street managers to pay the lower capital gains tax rate instead of the income tax rate that middle class families have to pay.
Cuomo has dismissed proposals to tax the rich at a higher rate, saying it will send the richest New Yorkers, who he says pay about half of the state’s income taxes, fleeing the state—a claim Pearl debunked in his testimony.
“I will tell you as someone who knows a lot of rich people in New York, the rich people who make decisions on where to live based mainly on taxes do not live in New York, and they have not lived in New York in decades,” Pearl said. “It would be a colossal mistake for us to compromise the things that actually make rich people want to live in this state in order to appease these fictional New York millionaires who care enough about taxes to leave if we expand the millionaires tax.”
The group added in its letter that since 2009, when New York passed a Millionaires Tax affecting households making $300,000 or more, the number of millionaires in New York has risen 63 percent.
Furthermore, the millionaires wrote, “Most of us will literally not notice the difference” in their tax bills if their rate is raised.
“The taxes we’re talking about will not affect people’s quality of life,” Disney told the New York Times on Tuesday. “They will not have any fewer private airplanes or boats because of this tax.”
Pearl added that his wealth provides such an enormous cushion that he—and, very likely, most other extremely high earners—couldn’t pinpoint how much Trump’s tax cuts had saved him.
“To tell you the truth, I’m not sure exactly,” Pearl told the Times. “I pay so much lower taxes than people who work for a living anyway, that I’m not overly worried about it.”
The Patriotic Millionaires have condemned President Donald Trump’s 2017 tax law, with member Eric Schoenberg calling the tax code a “monstrosity” and Disney releasing a viral video before the 2018 midterm elections warning of the GOP’s plan to pass even more tax cuts for the rich.
"Our tax system is a monstrosity. It's terrible in ways that have been perpetually slanted toward the rich. And I say this as someone who has done quite well in life."
-Patriotic Millionaire Eric Schoenberghttps://t.co/ZURbJjUgIQ
— Patriotic Millionaires (@PatrioticMills) February 12, 2019