Despite all the talk of newfound fiscal responsibility in state government, the reality is that for certain liberal legislators and special interest groups, fiscal responsibility means tax hikes. Judging by their recent actions, these folks will not stop until they have rammed through yet another tax hike that destroys more private-sector jobs and endangers New Yorks economic recovery. These liberal politicians desperately want more of your hard-earned money, and will stop at nothing to get it.
A few weeks ago, the Success Tax, a.k.a. the Millionaires Tax, was brought back to life as legislation in the state Assembly. I call it the Success Tax because thats exactly what it is - a tax on hardworking, successful people. You may remember that the enacted 2011-2012 State Budget did not contain an extension of the success tax, yet some politicians remained determined to resurrect the tax. Why? Because they want your money.
The phrase the Millionaires Tax is nothing more than political rhetoric. The intentional use of the word millionaire is class warfare-- certain politicians attempts to pit one group of citizens against another. But class warfare does not create jobs, build businesses, or put people back to work. It does not build up the middle class or make America successful. Hard work, entrepreneurship, risk taking and the private sector does. Unfortunately, though, class warfare is alive and well in our state Capitol.
In his testimony before the Joint Legislative Fiscal Committee back in February, E.J. McMahona highly respected, independent and non-partisan fiscal expertrepeatedly warned legislators against extending the state income tax surcharge on successful New Yorkers.
During his testimony, McMahon said the following: Higher income taxes create a disincentive to work, save and invest in New York. They sap the working capital of small businesses and they provide the states most successful and mobile taxpayers with another reason to consider shifting their base of operations to lower-taxed states. Mr. McMahon also said that when tax rates rise sharply, taxpayers respond by working and earning less, moving to another, lower-taxed state, or legally shifting or sheltering money through tax-exempt investments.
What this means is that whenever government hikes taxes on successful people, as New York did in 2009 with the implementation of the success tax, it creates an economic disincentive for them to work harder because what they earn gets taxed at a much higher rate. Its Economics 101 - when you tax something, you get less of it. Mr. McMahon also spoke to the reality that when taxes rise, successful people leave. Billionaire Tom Golisano, founder of Paychex and former owner of the Buffalo Sabres, was a prime example after he publicly announced that he was leaving New York because it imposed the success tax. As a result of his departure, Florida gained another successful New Yorkerand our state lost approximately $13,800 a day in revenue.
With almost 800,000 New Yorkers out of work, why would it make sense to increase taxes on the very same people we expect to create jobs? It doesnt.
Defeating the Success Tax once and for all will help our struggling economy and create an environment where private-sector jobs can flourish. Albany needs to focus on resurrecting the promise of good-paying jobs and a better tomorrow not creating class warfare or bad public policies.
As always, feel free to contact me with any questions or concerns regarding this issue or any other state topic. You can stop by my district office located at 15 Bridge St., West Carthage, call me at 315-493-3909, or email firstname.lastname@example.org.