The growing “soak the rich” chorus of the increasingly extremist Democratic Party might want to pay attention to what’s going on in some dark-blue Northeastern states.
On Monday, New York Gov. Andrew Cuomo announced that income tax revenues in the state have come up $2.3 billion short. He blamed the development in part on the Trump tax bill, which greatly curtailed write-offs for state and local levies, a benefit for the upper class that helped high-tax states disguise the actual costs of their profligacy.
Similarly, The Wall Street Journal reported Tuesday that New Jersey experienced a 35 percent decline in income tax revenue for December from the year previous. Connecticut, another tax-and-spend haven dominated by Democrats and public-sector unions, has so far avoided the same predicament, but officials there are worried about a lag later this year, according to the Journal.
Those who love to spend other people’smoney emphasize all the wondrous services that residents of progressive enclaves such as New York and New Jersey receive in return for their “contributions” to the public treasury. In fact, as Gov. Cuomo’s announcement highlights, many wage earners would prefer to keep more of their own money rather than launder their earnings through the administrative state.
“A growing list of public officials in high-tax states are expressing alarm that big earners are bolting to low tax-states,” the Journal noted, “as new data suggest that some homebuyers are moving in response to the year-old change in the federal tax law.”
Because “many residents of New York, New Jersey and Connecticut have been deducting well over” the new federal limit on state and local tax write-offs, the Journal reports, “the new tax rules are costing them tens of thousands of dollars more” than if they lived in more attractive tax climes.
The primary beneficiary on the East Coast is Florida, which has no income tax and has long attracted wealthy New York retirees. Las Vegas and Phoenix, with rapidly rising home prices and no or lower state income taxes, are also reaping the benefits, primarily because of the housing mess that is California.
The exuberant progressives looking to flex their muscles in Carson City should pay heed. Meanwhile, Gov. Cuomo has experienced an epiphany when it comes to punishing tax rates on the wealthy. “This is the flip side,” he told a New York public radio station this week. “Tax the rich, tax the rich, tax the rich. The rich leave, and now what do you do?”
Surely Gov. Cuomo and his esteemed team of advisers have enough clues to eventually unravel that great mystery.