Government policies have consequences. And proposals floated by leftist New York pols in Washington and in Albany will, if enacted, have grave consequences.
They will hit the pocketbook of every New Yorker, especially the already heavily taxed top earners, and they will further erode the Empire State’s fragile economic base.
Take, for example, Congresswoman Alexandria Ocasio-Cortez’s demands for lots of “free” stuff from the federal government. She wants all Americans to have universal government-sponsored health care, as well as income and job guarantees.
Then there’s Ocasio-Cortez’s trillion-dollar, pie-in-the-sky “Green New Deal” proposal to achieve a carbon-emission free economy in a dozen years.
To finance these extraordinary expensive and dubious proposals, Ocasio-Cortez calls for the top federal income tax rate to hit 70 percent.
The congresswoman probably doesn’t understand the consequences if her 70 percent tax proposal became law: It would wreck New York’s tax base which is heavily dependent on the top 1 percent earners who generate more than 40 percent of the state’s personal income tax revenues and nearly 50 percent of the city’s income tax revenues.
E.J. McMahon, research director at the Empire Center for Public Policy, has pointed out that “the last time the top federal rate reached 70 percent, the combined federal state-local income tax in New York was 75.9 percent. Without the SALT deductions, it would be 82.7 percent…”
In New York City, where Ocasio-Cortez resides, there are approximately 4 million households. One percent of those households, 40,000, pay nearly half of the total city income tax revenues.
If the combined tax rates exceed 80 percent, to save a fortune, many wealthy households would relocate to states like Florida that have no state or local income tax levies. It would be an easy move because they have the financial resources to do so and plenty of them already own a second home in Florida.
The departure of just 10 or 15 percent of the city’s top earners would put the city on a fiscal treadmill to oblivion.
In Albany there is proposed legislation that would create a state-sponsored single-payer health plan.
The consequences of a “Medicare for all” law would be untenable.
First, there would be the astronomical costs. The Empire Center’s health care expert, Bill Hammond, has concluded the program “would force all 20 million New Yorkers to change to a new plan, operated and paid for by Albany.
It would jack up taxes by an estimated $139 billion — much more than doubling the state’s already heavy tax burden.”
To finance “Medicare for all,” taxes would go through the roof. The temporary millionaire’s surcharge — which actually kicks in at $250,000 for married couples — would have to be made permanent.
In addition, Albany would have to impose a non-wage income tax on capital gains, dividends, certificate of deposit interest, etc., as well as a health-care payroll tax on employers and employees.
There are other potential consequences of “Medicare for all”: Top notch hospitals (i.e., Sloane Kettering Cancer Center) would lose revenue because under a single payer system, “all patients would become entitled to exactly the same coverage,” resulting in a “radical redistribution of resources.”
Significantly reduced income to New York’s cutting-edge hospitals could severely impact the quality of care and could result in layoffs and cutbacks in research programs.
New York has been losing residents to other states since the early 1960s. In the 21st century, between 2000 and 2007, the net migration loss was 1.6 million. Another million left between 2010 and 2017. And 190,000 took a powder between June 30, 2017 and July 1, 2018.
The reasons for migrating to other states: taxes are exorbitant, government regulations are onerous, cost-of-living is unaffordable, and better paying working-class jobs and affordable homes are available in low tax business-friendly states.
If the radical agendas of leftists in Washington and Albany become law, New York’s political class better be prepared for the consequences: a huge exodus of our most productive workers and entrepreneurs.