New York Governor Andrew Cuomo seems to have just discovered a basic law of economics: The more you tax something, the less you get of it. Sadly for the coffers of New York, wealthy people are fleeing the Empire State to take up residence in states such as Florida, which levies no personal income tax. This exodus has, according to Cuomo, led to a significant drop in tax receipts, leaving a projected budget deficit of $2.3 billion, and even greater ones in years to come as more wealthy New Yorkers migrate to more tax-friendly states.
At a news conference yesterday, Cuomo repined, “We’ve set up reserves, but this is worse than we had anticipated.” Indeed, he called New York’s fiscal condition metaphorically “as serious as a heart attack.” New Jersey is in the same ICU ward. It’s been estimated that in the last year some 5,700 millionaires have pulled up roots and planted themselves in more fiscally conservative states. And it looks like this exodus is only the beginning trickle of what could become a dam breach. State Democratic Comptroller Thomas DiNapoli called the present deficit “…the most serious revenue shock that the state has faced in many years,” and predicted that it will “…get worse before it gets better.”
Cuomo, now that he has had his economic epiphany, is counseling against any further increases in taxes on the rich to try to solve New York’s fiscal problems. With an unexpected surge of common sense, he declared, “Tax the rich, tax the rich, tax the rich. The rich leave, and now what do you do?”
No doubt he has his work cut out for him in trying to revamp New York’s tax-hungry bureaucracy before the state falls into a financial abyss. But, before he tackles this crisis in full, perhaps he could spare a few moments to counsel his Democratic peers with his newfound wisdom.
For instance, left-wing politician Elizabeth Warren has just unveiled a proposal for a special annual tax on the top 0.1% of the wealthy class in America. She tweeted:
“We need structural change. That’s why I’m proposing something brand new — an annual tax on the wealth of the richest Americans. I’m calling it the ‘Ultra-Millionaire Tax’ & it applies to that tippy top 0.1 percent — those with a net worth of over $50M.”
She went on to estimate that over ten years it would bring almost $3 trillion into the federal coffers. That is, of course, if those at the tippy-top decide not to move with all their assets to a tax-haven offshore and renounce U.S. citizenship. I hear the Cayman Islands are delightful. And the Bahamas aren’t too shabby, either.
I can hear Cuomo now: “Liz, tax the rich, tax the rich, tax the rich. The rich leave, and now what do you do?”
Or, how about Alexandria Ocasio-Cortez, who is on a crusade to save the world in under twelve years by completely destroying and remaking the US economy and all our lifestyles through her “Green New Deal” . She has proposed a 70% tax on incomes over $10 million annually. I wonder how many new loopholes that would create as intelligent millionaires find ways to legally park money elsewhere. Remember, when you tax something, you get less of it in the future. Ocasio-Cortez and her fellow first-year congresswoman Ilhan Omar (who proposes a top tax rate of up to 90% “for a start”) could both benefit from a visit by Cuomo.
“Alexandria, Ilhan, tax the rich, tax the rich, tax the rich. The rich leave, and now what do you do?”
And how about Kamala Harris? She is suddenly finding a slew of human rights that must be guaranteed by the federal government for all bi-peds: Medicare for all, free education for all, pay increases for all but the wealthy, open borders for all….and so on. Right now, our federal government expects to take in $3.422 trillion in FY 2019. In that same period, the government plans to spend 4.407 trillion, leaving a deficit of $985 billion to pile on to our massive national debt — ballooning it to almost $22 trillion by today’s reckoning. The programs that Harris and other tax and spend politicians want to implement would require an increase of more than everything we already take in through federal taxes annually. Medicare for All by itself is estimated to cost an average of $3 trillion a year.
When people already feel overtaxed by a bloated government, which never seems to be able to find a way to trim spending but always knows how to consume more resources, finding more than double the amount they are already forking over to the IRS does not sit well.
“No worries,” say these Democratic and socialist politicians. “We will actually give the middle class a tax cut and the poor a tax credit, and we will provide all these free services and benefits by soaking the wealthy, because of course it is morally incumbent upon them to pay their fair share.”
Of course, even if the wealthy were to stay around to have their life blood drained to subsidize this socialist utopia, the numbers don’t work out. There isn’t enough money among the top 1%, or even the top 20%, to fund the massive programs being promised. But of course, the wealthy won’t hang around, once they see the torches and pitchforks of the “fair share mob” on the march to redistribute their wealth.
I fear Andrew Cuomo’s voice will get drowned out in the fevered excitement of the utopians. ” Wait, wait,” he will try one last time, “tax the rich, tax the rich, tax the rich. The rich leave, and now what do you do?” Or maybe in this case, “The rich have been drained dry, and now what do you do?”
There is one solution. Prevent the rich from leaving.
I propose that the Democrats, as soon as possible, approve as much money as possible to fund border security. Build the wall on our southern border. Undertake an even more massive build on our northern border. Increase the ICE and TSA and Homeland Security budgets so they can track all millionaire citizens. Put them on our no-fly lists, and add tracking devices to their private jets and yachts.
Perhaps if walls and border security won’t keep illegal immigrants out, they may at least keep our millionaires in! Then, like parasites we can live and grow off them until we have drained them dry.
What will we do after that? No worries. I’m confident that our politicians will have an answer.