Extension Of The “Success Tax” Would Destroy Jobs, Drive Away Even More Of NY’s Best & Brightest
“The power to tax involves the power to destroy.” This quote, attributed to U.S. Supreme Court Chief Justice John Marshall, dates all the way back to 1819, yet, it still rings true some 192 years later. Government’s ability to tax is, without question, a destructive power, nowhere more so than right here in New York State where families, homeowners and companies pay some of America’s highest property, income, business and sales taxes. All those taxes have damaged our economy and destroyed countless jobs.
EFFORT TO EXTEND THE “SUCCESS TAX” SENDS THE WRONG MESSAGE
While this weekly column is being written, there is a not-so-secret effort underway in Albany to try to extend the “Success Tax,” a government surcharge imposed on some of the most successful New Yorkers that was slated to expire (or, in Albany-speak, “sunset”) at the end of 2011. This Success Surcharge is imposed on households and small businesses making over $200,000 annually. Certain politicians in Albany are so unwilling to cut wasteful spending and right-size government that they are teaming up with special interests who want to see this Success Tax stay on the books. If they “win,” New York loses: loses more jobs, more opportunities, and more of our best and brightest.
SUCCESS TAX LATEST IN A LONG LINE OF ALBANY’S BROKEN PROMISES
When the Success Tax was first enacted as part of the 2009-10 State Budget, certain Albany politicians sold this snake oil to the public as a “temporary revenue enhancer” and promised it would be in effect only until the end of 2011. This sales job was just the latest in a long line of Albany con jobs where the politicians continually promise that any new taxes, fees and surcharges are always “temporary,” much like the pyramids were temporary. Here we are several months away from when the Success Tax was supposed to expire, and, like clockwork, Albany is trying to go back on its word.
I opposed the Success Tax from the beginning because it would hurt our economy, cost New Yorkers jobs and, once it became law, be harder to get rid of than Thanksgiving leftovers. All of these things have, regrettably, come to pass. An extension of the Success Tax could drive away more jobs and actually drive up unemployment. With more than 800,000 unemployed New Yorkers – and tens of thousands more that have given up looking for work in this brutal job market – expanding the ranks of the jobless is the last thing our state needs.
WHEN TAXES GO UP, SUCCESSFUL PEOPLE GO AWAY
An obvious fact that Success Tax backers don’t seem to understand – or conveniently forget – is that money, talent and resources are not “locked” into any one state or region. Instead, they are highly mobile, transferable and fluid – people and companies can set up shop anywhere. Having spent most of my adult life working and running successful companies in the private sector, I know that employers, entrepreneurs and successful people will go wherever taxes and the cost of doing business is lowest. When schemes like the Success Tax drive successful New Yorkers away, state government doesn’t gain revenue, it loses it.
Case in point: former New York resident and billionaire businessman Tom Golisano moved to Florida – which has no state income tax – in 2009. He left New York largely due to its ever-increasing tax burden and the Success Tax was the final straw. Golisano’s departure meant New York has lost nearly $13,800 per day since he is no longer paying all those state income taxes. That revenue is gone, forever – talk about government cooking the proverbial golden goose!
SUCCESS TAXES DIDN’T WORK IN OREGON OR MARYLAND
Of course, New York is not the only state to prove that high taxes drive away successful people. Backers of the Success Tax should read a Wall Street Journal article from Dec 21, 2010 titled “Ducking Higher Taxes: Oregon’s vanishing millionaires.” The piece reported that Oregon collected one-third less revenue than had been anticipated from its imposition of a Success Tax – and saw one-quarter of these filers go missing. Maryland had a similar experience with the Success Tax it enacted in 2008, as one-third of that state’s millionaire households disappeared from the tax rolls after rates increased. Lost revenue, lost residents, lost jobs, lost opportunities: this is the true legacy of the Success Tax. Don’t take my word for it: visit the National Center for Policy Analysis – www.ncpa.org – and enter the keywords “Ducking Higher Taxes” to search for an on-line copy of the Wall Street Journal article. Read it and weep.
NY HAS A SPENDING PROBLEM, NOT A REVENUE PROBLEM
No matter what you hear from certain “the sky is falling” Albany politicians, state government does not have a revenue problem. In fact, revenues have steadily increased by nearly 70 percent over the past decade – and last year’s budget actually spent more than the previous year. Does that sound like a revenue problem? The real problem is that Albany’s broken status quo – the same politicians and special interest groups currently plotting to extend the Success Tax– are addicted to spending more of your hard-earned money.
The backroom effort to try keeping a Success Tax on the books should remind every taxpayer that whenever the tax-and-spend crowd in Albany says a tax is only “temporary,” they had better start guarding their wallets. I will continue working to expose this latest Albany scheme to extend the Success Tax. While “nothing may succeed like success,” nothing would destroy more jobs and opportunities for all New Yorkers like extending the Success Tax.
As always, constituents wishing to discuss this topic, or any other state-related matter should contact my district office at (315) 781-2030, or e-mail me at email@example.com. You also can follow me on Facebook and Twitter for the latest news and informational updates regarding state government and our Assembly Minority Conference.