TR2: Mike Bloomberg on NYC taxes

More evidence that ‘Tax Revolt 2′ may be slowly gaining momentum. From the WSJ editorial page:

New York state and city revenues are falling amid the collapse of Wall Street, and state lawmakers in Albany are considering income tax hikes for households earning between $250,000 and $1 million, who already pay 6.85% to the state. Meanwhile, the New York Post reports that City Council Speaker Christine Quinn wants to increase the city’s top tax rate of 3.68% for households earning as little as $297,000 (to 4.25%); those earning $532,000 to $1.2 million would pay 4.45%; and above that 4.65%. But late last week Mayor Bloomberg…said that raising taxes on high earners could drive them from the city. "One percent of the households that file in this city pay something like 50% of the taxes," explained the Mayor. "In the city, that’s something like 40,000 people. If a handful left, any raise would make it revenue neutral. The question is what’s fair. If 1% are paying 50% of the taxes, you want to make it even more?"

Unfortunately, the WSJ doesn’t point out that Mayor Bloomberg is seeking to increase the city sales tax. Granted, that may be the least risky approach to raising revenues; for example, if rising income taxes did drive high taxable incomes away, the city might eventually have to raise sales taxes anyways, possibly on a smaller consumer base. A sales tax also brings in revenue from non-residents. But ignoring Bloomberg’s willingness to hike a non-progressive tax rate lends credence to the belief that the WSJ’s editorial staff sometimes think like ‘country club’ supply siders.

URLs: 

http://online.wsj.com/article/SB123500384765617949.html 

http://www.nj.com/news/index.ssf/2009/01/bloomberg_seeks_increase_in_ny.html