By Steve Levy
The state government, which is desperate to balance a structural budget deficit of nearly $14 billion over the next three years, is grasping at straws to come up with solutions.
The ideal remedy would be to cut its dramatic increase in spending and place a cap on the mindless Medicaid growth over the past six years, including lavishing free health care on illegal aliens.
Don’t hold your breath for any cuts.
It won’t happen.
Instead, state leaders will look for more gimmicks in an effort to come up with more money. Governor Kathy Hochul doesn’t want to go back on a promise that she wouldn’t raise income taxes this year. (Though nothing stopped her from promising not to impose congestion pricing right before a previous election, only to reverse herself immediately thereafter.)
In any event, they’ve now come up with the idea of putting levies on purchases of gold and crypto, and even taxing the purchase of yachts.
But, wait! Haven’t we seen this once before?
As I noted in my book, Solutions to America’s Problems, Congress tried in the 1980s to get more money by taxing the purchase of yachts. Appropriately enough, it was called the “yacht tax.”
At the time, there was great hostility over the yuppies on Wall Street raking in huge sums as the market soared. A class envy approach emerged, whereby it was thought that sapping money from this nouveau riche group would not only poke a stick in their eyes as a sense of vengeance, but it also would raise a great deal of money with which to do good.
But the path to hell is often paved with good intentions.
What actually happened, predictably enough, is that the yacht tax created a disincentive for the wealthy to buy yachts. So they put their money toward other luxury items and investments that didn’t come with this punitive tax.
And who were the people hurt? It was the working and middle-class people who worked on the assembly lines building these boats. It got so bad that Congress had to reverse itself and end the yacht tax so that the boating industry could come back, and the people could have their jobs restored.
You know how the saying goes when you refuse to learn from history: they are doomed to repeat it.