Gov. Andrew M. Cuomo squirmed this week after preliminary news of possible federal personal income tax cuts was announced in Washington. The proposal would make deep tax cuts, but end permitted deductions of state and local personal income taxes from federal tax return filings, which many taxpayers use to reduce their federal burden.
“Devastating” was the word the governor used to describe the plan’s potential impact on famously high-tax New York, adding that such a plan might convince New Yorkers that “maybe it’s time we leave” the state.
New Yorkers are doing that already partly because of high New York taxes. But it’s possible we’ve seen nothing yet: Cuomo’s increasingly anticipated $91 billion single-payer health care proposal — and the commensurate state income tax hike being suggested to pay for it — would almost certainly expedite the premonitory escape-New-York trend into a stampede exodus.
He’s got to know that.
First the existing trend: On Friday, PolitiFact New York, the independent arbiter of political rhetoric, backed a statement made by New York Republican Chairman Ed Cox earlier this month that New York has “the biggest outmigration of citizens of any state.”
Here’s some of what PolitiFact wrote:
“New York state lost a net 191,367 residents to other states between July 2015 and July 2016, more than any other state. Where are they going? The most popular destination is Florida, according to U.S. Census Bureau estimates. Almost 70,000 New York state residents moved to the Sunshine State in 2015. The second-most popular destination was New Jersey, which gained about 50,000 people from New York state. California ranked third with almost 37,000 people from New York.”
This is hardly news to anyone. Everyone in New York knows a family — or a dozen — who have moved out of state for a friendlier tax clime or better job prospects. How often have each of us heard this from a neighbor in one form or another: “Once the kids are through school, it’s off to [fill-inthe-blank]?”
A state tax hike and federal deduction loss combined could fuel the perfect New York tax storm, making living or looking for work here significantly more difficult.
The proposed New York Health Act — it’s been kicking around Albany for a while without being taken seriously, until Cuomo began actively signaling his support this month — would increase state income taxes from 6.65 percent to 16 percent for those making $215,000 per year and from 9 percent to 16 percent for those earning $1 million or more annually, according to Politico. (These are many of the job providers.)
The plan would get rid of all health insurance companies in New York in favor of a state government-run health care system for all. According to Politico and others, the New York Health Act has a real chance of passing in 2018 if Democrats take the State Senate, a distinct possibility.
One of my favorite New Yorker cartoons is of a man reading the obituaries in the newspaper. Here’s how each death headline appears to him: Two Years Older than You; 12 Years Younger than You; Exactly Your Age.
That’s the way New Yorkers are likely reading into the nascent Republican federal tax cut proposal — what does it mean for me? Add a New York Health Act into the calculations, and the Health of New York may concern many fewer taxpayers than it does now.
William F. B. O’Reilly is a consultant for Republicans.