Earlier this month, Democratic New York Gov. Andrew Cuomo blamed the Empire State’s approximate $2.3 billion reduction of anticipated tax revenue on new provisions in the federal tax code.
Now he seems to be blaming Florida.
If it’s a villain Cuomo is in search of, he should look to his own state’s tax policies.
“That’s a $2.3 billion drop in revenues,” Cuomo said, according to the New York Post. “That’s as serious as a heart attack. This is worse than we had anticipated.”
At the time, the governor blamed the revenue loss on a change in the federal tax code that reduced the deduction that taxpayers could claim for state and local taxes, known as SALT, to $10,000, a change that affected high-income earners.
That was last week. “This week the Governor of New York blamed budget shortfalls on the state of Florida,” CBS Miami 4 reported.
The outlet went on to report that New Yorkers are snatching up luxury Florida residences to claim as their new home, because Florida has no income tax, as opposed to New York’s crippling tax structure.
In short, Florida is stealing New York’s highest taxpayers, just like Nevada and Arizona are doing the same with those in California.
New York officials have a familiar story: They observe that 46 percent of the state’s revenue from personal taxes are paid by its top one percent of income earners.
Armed with that knowledge, the governor said he couldn’t squeeze more out of the wealthy — unless he wants to see an even bigger exodus.
“I don’t believe raising taxes on the rich. That would be the worst thing to do. You would just expand the shortfall,” Cuomo said, according to the Post. “God forbid if the rich leave.”
But he still hasn’t taken that reasoning to its next level — to lower tax rates on not just the wealthy but across the board. That would serve as an incentive to keep the wealthy within New York, while putting more money in everyone’s wallet, which would, in turn, boost the state’s economy.
Instead, he asked President Donald Trump to rethink the $10,000 SALT deduction cap, telling reporters afterwards that the president "suggested he was open to a change."
Cuomo added that Trump is considering the request "because he understands: You hurt New York, you hurt California, you're hurting the economic engines of this nation," according to Fox Business.
But, of course, it’s not just up to Trump. The president can suggest, but Congress has to act. Although the House may be open to the idea, the Senate may think otherwise.
The problem in New York may be more than simply one of revenue — it may primarily be a spending problem, just as it is at the federal level.
That was made clear in New York City at the same time Cuomo sounded the alarm over the state’s shortfall. New York City Mayor Bill de Blasio, another high-tax guy, announced that parents can apply for “free” full-day pre-K and 3-K.
There’s no such thing as “free” — someone has to pay for it and sooner or later they’ll get tired of paying for it and move on.
If the situation continues, Cuomo may be the one calling for a “big, beautiful wall” — but one surrounding New York State to keep taxpayers from fleeing.
Michael Dorstewitz is a retired lawyer and has been a frequent contributor to BizPac Review and Liberty Unyielding. He’s also a former U.S. Merchant Marine officer and an enthusiastic Second Amendment supporter, who can often be found honing his skills at the range. To read more of his reports - Click Here.