The Point: 'Soak the rich' still afloat in Albany
Assemb. Michaelle Solages (D-Elmont) is chairwoman of the NYS Black, Puerto Rican, Hispanic and Asian Legislative Caucus that proposes a slew of tax hikes on the rich. Credit: James Escher
Despite Gov. Kathy Hochul’s introduction of a spending plan awash in revenues, with no deficits in sight, the NYS Black, Puerto Rican, Hispanic and Asian Legislative Caucus on Tuesday prepared to propose tens of billions of dollars in new tax hikes on the top tier of New York’s wealthy.
According to a draft of the position paper obtained by The Point circulating among caucus members, chairwoman Michaelle Solages (D-Elmont) states: "It is imperative that New York State establishes a tax framework that addresses generations of wealth disparities that have kept communities of color locked out of the American Dream.
"New York is the financial center of the nation and with that title comes the responsibility to lead by example," she says in a preface to the "People’s Budget" proposal.
Among the "revenue-raisers" the caucus seeks are: a "billionaire wealth tax" that could bring in $10 billion, increasing inheritance taxes on the top 1% that would raise $8 billion, and a handful of other measures that have kicked around for years from a pied-à-terre tax to a yacht-and-jet tax.
There would also be a new $7 billion "capital gains" tax. As stated in the draft proposal: "The federal government taxes investment income at a much lower rate than the income we make at our jobs; New York can fix this by adding a tax to investment income that’s equal to the tax break the rich are getting from the federal government."
While the fate of this wish list is doubtful at the outset of the annual budget process, the proposals pose a sharp contrast to the much-ballyhooed threat of driving the biggest taxpayers out of New York.
But even in the draft stage, the memo suggests there will be legislative pushback against the no-new-taxes-or-fees goal stated by Hochul and enforced by her budget director, Robert Mujica. However, he did acknowledge in a news conference that taxes previously raised on top earners will stay in place for the time being.
When he was kept in the job by Hochul in October, Mujica drew fire from leftward Democrats who derided him as the author of Hochul predecessor Andrew M. Cuomo’s "corporate friendly" and "austerity" policies.
Hochul, in her recent State of the State address, hinted at her concern over taxes when she called the state’s population drop last year of 300,000 "an alarm bell that cannot be ignored." With revenues above those projected and federal aid abundant, Hochul went into her first budget presentation with a range of choices between restraining spending and expanding on pandemic-time programs — from child care and housing to infrastructure.
Reached in Albany Tuesday, Solages said the proposed changes should be considered as part of long-term planning for future years when there won’t be surpluses. Such projects as improvements for Nassau Community College, for example, should be considered. She refuted warnings that such moves risk an exodus of top taxpayers from the state.
In response to Tuesday’s budget presentation, Andrew Rein, president of the nonpartisan, pro-business Citizens Budget Commission, noted the opportunity to both apply fiscal restraint and expand programs. He was quoted Tuesday as saying that going forward, "The risk is the feeding frenzy, the fiscal cavorting, the fiscal hangover."
In contrast to the Solages-chaired caucus, Conservative Party chairman Gerard Kassar pounded the "taxpayer exodus" theme in the wake of Hochul’s address by saying: "The moving trucks keep arriving. Boy, do we need a change of direction in Albany."
And so a variation of the annual ideological scrimmage is forming — but at a unique moment in state finances.
Dan Janison is a member of the Newsday editorial board.
