By Steve Levy
An opinion piece published in Newsday that was penned by the head of the New York State United Teachers union illustrates how out of touch the left is with the basics of our economy. https://paper.newsday.com/html5/reader/production/default.aspx?edid=ea2f40a6-4857-4157-9270-37f558eb6081&pnum=19
The article was entitled “Superrich should pay fair share in taxes.” It claimed that imposing a special assessment on those earning over $5 million a year would cure all of New York State’s budgetary and humanitarian problems.
The premise of the article is that the wealthy simply don’t pay their fair share. Apparently, the author is unaware of the fact that, while the top 1% earns 22% of all income earned, they pay out over 40% of all the revenue that is collected by the government. https://www.ntu.org/foundation/tax-page/who-pays-income-taxes
And that’s not a fair share?
My criticism that is lodged at the author has nothing to do with an empathy for the very wealthy. If I thought taxing them to the hilt would create a more equitable and decent society, I would be for it in a minute. But, unfortunately, overtaxing successful wage earners is actually counterproductive and does more harm than good for the middle and lower classes who we are trying to help.
That’s primarily because the wealthy can move out of New York anytime they so desire, and many indeed have. https://nypost.com/2023/11/11/metro/new-york-loses-10-billionaires-in-four-years-as-magnates-flee-for-florida/
Why would they stay in New York to get taxed to Kingdom Come when they can move to Florida, Tennessee or South Carolina where there’s no state income tax and there are a few regulations that would strangle their businesses?
Once those high earners leave, a further gap in the state budget develops, thereby lessening the ability to provide needed programs for the poor and the working class. The big spenders just don’t get this.
If you want more revenue coming into the government to help the poor, you should cut taxes. That’s not hyperbole. The facts prove this. When across-the-board tax cuts were enacted by Presidents Kennedy, Reagan and Trump, the amount of revenue pouring into the federal government actually increased significantly in all three eras. https://www.heritage.org/taxes/commentary/what-jfk-could-teach-modern-democrats-about-taxing-the-rich
That’s because the tax cuts spurred a burgeoning economy that led to higher incomes that, in turn, led to more tax revenue. Meanwhile, when taxes were raised, as they were in the Obama administration, growth remained a tepid 1.6% in the year he left office.
The author claims there is no such thing as a trickle-down effect in the economy. Tell that to the people who work for mortgage, title or home inspection companies when the real estate market is booming. Not only do billionaires buy big mansions, but all of the middle-class folks who work in the real estate industry, not to mention furniture stores, rake in the dough as well.
When the market and the economy dry up, it’s not the rich you’re hurting. It’s the people further down the line who rely on the wealthy investing their money.
Too bad the leader of this union just doesn’t get basic economics.
Steve Levy is Executive Director of the Center for Cost Effective Government, a fiscally conservative think tank. He served as Suffolk County Executive, as a NYS Assemblyman, and host of “The Steve Levy Radio Show.”