Albany Progressives Aim to Drive Away More New Yorkers with Increased Taxes
Albany progressives are advancing a proposal for substantial state tax increases, disregarding the exodus of taxpayers and job creators fleeing New York due to its already burdensome tax rates. Both the state Senate and the Assembly have included significant tax hikes in their responses to Governor Hochul’s budget plan, potentially amounting to $2.2 billion.
The proposed tax hikes target high-income earners, with those making over $5 million facing a half-percentage-point increase, pushing the top tax rate to 11.4%, and a staggering 15.3% in New York City. Corporate taxes are also set to rise under the proposal. New York already leads the nation in taxes, with individuals and businesses facing a heavy tax burden.
The Citizens Budget Commission reports that New York and its localities collect 63% more taxes per person than the national average, posing a significant challenge to the state’s competitiveness.
Despite warnings, Albany lawmakers seem unwilling to acknowledge the correlation between high taxes and the mass exodus of New Yorkers. State Comptroller Tom DiNapoli reports a population decline of over 533,000 residents from July 2020 to July 2023, leading to a substantial loss in tax revenue.
The population decline directly translates to a decline in tax revenue, with personal income tax collections falling by nearly $11 billion in the past year alone. High-earning taxpayers, who contribute significantly to state revenue, have been particularly affected, with an increasing number choosing to leave New York.
Despite warnings from experts, Albany legislators seem determined to proceed with the tax hikes, potentially exacerbating the state’s fiscal challenges. The Empire Center’s E.J. McMahon highlights the alarming trend of high-income earners leaving the state, emphasizing the need for lawmakers to reconsider their approach.
While Governor Hochul has labeled tax hikes as a “nonstarter,” her track record suggests a willingness to compromise with lawmakers. Failure to resist further tax increases could accelerate the outbound migration, posing a significant threat to the state’s economy and budgetary stability.
The push for additional tax hikes by Albany progressives threatens to exacerbate New York’s ongoing exodus of residents and businesses. Despite warnings from experts and evidence of the negative impact of high taxes on the state’s economy, lawmakers remain steadfast in their pursuit of increased revenue.
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Governor Hochul’s stance on the matter will be crucial in determining the future trajectory of New York’s fiscal policy and economic competitiveness.