There was a time when New York Governor Andrew Cuomo held his domain in an iron grip. He was untouchable. That time has passed. From the clever moniker “Governor Death” – earned after thousands of nursing home residents died because of his policy – to the myriad accusers coming out of the woodwork to expose a history of sexual abuse and bullying, Cuomo’s kingdom is crumbling.
Now that even many in his own Democratic Party are cutting ties and he faces removal, the governor has agreed to significantly increase taxes on the wealthy – a move he has avoided his entire career. Is the faltering king of New York reaching desperately for a lifeline from progressives in the Empire State – one final Hail Mary to stave off his doom? More importantly, can he tax his way out of trouble?
Begging for Some Backup?
Cuomo has been governor of New York since 2011. In the ensuing decade, he has resisted spending hikes of more than 2% per year and tax increases. Until now, he has had the clout to win those arguments. This year, Cuomo asked for only a small tax bump, but the legislature had other ideas. Whether it’s a sign of his waning influence or an attempt to appease the far left in a desperate cry for help – or both – the governor ceded to a larger wealth tax.
The New Millionaire’s Club
The new budget for the Empire State creates a millionaire’s club that no one seems interested in joining. The deal increases personal income tax to 9.65% for anyone bringing in a million a year. It also creates two new tax brackets: 10.3% for anyone making between $5 million and $25 million and 10.9% for anyone making more than $25 million. The tax hike is expected to raise around $4.3 billion a year – but only if folks hang around to pay it! Many now expect a mass exodus of wealth as the millionaires and billionaires move out to avoid the new tax – and take their businesses with them.
Swimming With the Sharks
As popular as these tax hikes are among liberal leaders in the state, the wealthy residents aren’t likely to hang around for it. Andrew Rein, president of Citizens Budget Commission, calls the plan “economically risky and fiscally unnecessary.” As he explained, between the federal COVID bailout and higher tax receipts than expected from the last fiscal year, the state should have $22 billion over the next two years more than it had previously anticipated – that’s nearly $1 billion a month.
Andrew Yang, former presidential candidate and now frontrunner for the job of mayor of New York City, nailed the perfect soundbite when he warned folks might “vote with their feet and head to Florida.”
But this isn’t just a battle of the Andrews. Another candidate for mayor of the Big Apple, Ray McGuire, also mentioned that the state doesn’t need the tax hike. “If we needed to raise taxes to balance the budget,” he said, “I would agree that people like me who have done well should pay more to help out our city.”
Also, it should be pointed out that both of those using Cuomo as a political springboard for aspirations to take over NYC are fellow Democrats. That the more fiscally conservative residents and politicians oppose this move goes without saying.
A Hole of His Own Digging?
Is the governor just digging his hole deeper by creating great moments for those looking to rise up the party ranks? The Democratic Party certainly has a history of eating itself. Dangerous as that is, the governor might not feel he has any choice in the matter. If he doesn’t find allies – and fast – his days of governing are probably over. The question is: Will this last-minute pandering to the “democratic socialist” crowd pull him out of the hole – or bury him for good?
At this point, what does he have to lose?
Read more from James Fite.