EJ
McMahon just can't help himself. The Manhattan Institute's "Director of
the Empire Center for New York Policy" proves in a series of op-eds
that he's more far-right ideologue than economist and more worried
about pushing his agenda than the facts. Last week it was the Daily News, today it was the New York Post, but the message was still the same: taxes and spending=bad, cutting services=good.
So
while President Obama is fighting to save our economy through a massive
stimulus package, McMahon is intent on pulling New York in the opposite
direction, and straight off an economic cliff. And he isn't going to
let any "facts" get in the way.
Let's
take it from the top. Like McMahon said last week, 41% of New York's
income tax revenue comes from the richest 1% of taxpayers. Seems like a
lot, until you consider just how rich they are. That same 1% earns
more than two and a half times the total income of the bottom 50% of New Yorkers. (1) In fact, New York has the widest income gap between the rich and the middle class of any state in the nation (2).
Turns
out, New York's wealthy pay less of their income in state taxes than
the rest of us - the top 1% of New Yorkers pay 6.5% of their income in
state taxes, while the middle class pays a whopping 11.6% of
theirs. (3) How's that possible? New York State's income tax hits its
top rate at just $40,000 of family income - which means Donald Trump
pays the same tax rate as his doormen and limo drivers. Combine that
near-flat tax with regressive sales and property taxes, and being a
wealthy New Yorker turns out to be a pretty sweet deal.
McMahon
is right about one thing, spending in New York has gone up. But he
doesn't say why. We made a conscious - and millions of New Yorkers
would say wise - choice to provide millions of uninsured children with
healthcare coverage, invest in our future by instituting universal
Pre-K, and finally begin to fully fund underprivileged school districts that have historically been denied their fair share.
Eviscerating the budget as McMahon proposes would undo those efforts, and set New York back a decade.
Finally,
McMahon's favorite myth is that raising taxes on the wealthy would
cause them to leave the state, and damage our long-term economic
prospects. But he seems to have forgotten what happened the last time
the state raised income taxes on the rich in 2003. The economy
recovered, the rich got richer and more numerous (there were more
high-end taxpayers when New York phased out the tax increase in 2006
than when it began), and we were able to prevent billions in
devastating cuts to healthcare, education, and hundreds of crucial
public investments. (4)
In fact, hundreds of economists led by Nobel Prize winner Joseph Stiglitz warned
in a letter to the Governor this fall that reducing critical spending
would only deepen New York's recession. What's more, as the New York
Times columnist Paul Krugman points
out, slashing our way out of the fiscal crisis would have the effect of
weakening the economic stimulus President Obama and Congress are poised
to put in motion.
There is a way out of the
fiscal crisis. But it will mean asking everyone to pay their fair
share, including the wealthy New Yorkers who could most afford to do
so.
