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Is Taxing the Rich the Answer to N.Y.’s Budget Deficit?

A $14.5 billion budget deficit looms, as tax revenue takes a hit from the pandemic’s economic fallout. Public services vital to many communities across the state could be decimated.

Is there some other revenue source that could help spare needy New Yorkers from the expected cuts?

To some Democrats in Albany, one attractive answer is a proposal that has been pushed unsuccessfully for years: increasing taxes on the ultrarich.

As the pandemic highlights inequality, and threatens to further entrench the gulf between the haves and the have-nots, some legislators see taxing the rich to protect people who rely on public services as a sensible solution.

But they face a staunch political opponent: Gov. Andrew M. Cuomo.

[Proposals to tax the rich have been blocked by Republicans for years, but now the Democratic governor is pushing back.]

One Democratic proposal to raise revenue for education would increase the tax rate on millionaires to 9.62 percent for those who make up to $5 million, 11.32 percent for those with income between $5 million and $100 million, and up to 11.85 percent for those who earn more than $100 million. The current tax rate for people earning more than $1 million a year is 8.82 percent.

Another idea under consideration is activating the state’s stock transfer tax. The tax charges a fee on most sales of stock in New York, though the state currently refunds the entirety of that amount, a policy that began in the 1980s.

Then there is the so-called billionaire’s tax, which would tax the unrealized capital gains — or the appreciation of assets not yet sold — of New York’s nearly 120 billionaires. The proceeds would be redirected to workers not eligible for unemployment insurance or federal stimulus money.

Progressive Democrats have long tried to push proposals to tax the wealthy. But amid the economic devastation of the pandemic, the idea has taken on new significance.

“We are playing with fire: These are people’s lives,” said State Senator Alessandra Biaggi, a Bronx Democrat who is co-sponsoring a bill to tax the ultrawealthy. “It is not OK to not act.”

Andrea Stewart-Cousins, the Senate majority leader, said in July that the coronavirus crisis was part of the reason she threw her support behind taxing “multimillionaires and billionaires to help our state shoulder this extraordinary burden.”

But Mr. Cuomo said taxing the rich would not raise nearly the amount of money the state needs. “There is no combination of savings, efficiencies, tax increases that could ever come near covering the deficit,” he said.

Pressure the federal government for help, despite the slim hopes of Democrats and Republicans reaching a deal that would solve all of New York’s financial problems.

A proposal calls for putting the Port Authority Bus Terminal underground. [New York Post]


The Times’s Derek Norman writes:

Zoe Watnik and Amanda Zoeller Newman were strangers when they first wrote letters to each other in the summer of 2018. Now good friends, they call, text, meet up (at times with their respective partners) and Zoom regularly.

That year, New York Today had paired some of our readers in the hopes that they would become pen pals. It was an effort to reignite the fading art of letter writing.

The project was placed on the back burner after we reformatted the newsletter. But recently Ms. Watnik, 31, wrote in to share that she and Ms. Zoeller Newman, 33, had carried on with their correspondence — without New York Today’s guidance and throughout the coronavirus crisis.

[If you participated in the New York Today pen pal project and have continued writing letters, we’d love to hear from you. Email Derek Norman at derek.norman@nytimes.com.]

“Letter writing was something that was relatively new to me, so I had to go buy stationery, and, of course, Zoe was sending super-cute cards, so I couldn’t just send a folded-up piece of notebook paper,” Ms. Zoeller Newman, a benefits consultant, recalled in an interview. She said she had joined the project that summer in 2018 because she was eager to learn about New York after moving with her husband from Florida to Long Island City.

She added: “It was really just about getting to know each other as people. There really was something genuinely cool about not having that instant gratification that you would from texting or social media.”

What began as letters of “Who are you?” and “What does your daily life look like?” soon turned to bonding over food and museums, Ms. Watnik’s upcoming marathon and the everyday experiences of living in the city. (Though during the pandemic, Ms. Watnik, who works at the Morgan Library and Museum, temporarily relocated to Princeton, N.J.)

Ms. Watnik ended up running through Ms. Zoeller Newman’s neighborhood during her marathon, but the women didn’t spot each other; they had never met in person. Soon after, they met for a drink. Now, they said, they usually touch base with each other weekly.

The letter writing continues to be important to them: Despite the ease of communicating via text messages and social media, they still make time to send regular mail.

“Her new thing is taking excess scrapbook materials and making her own postcards, so I get these nice arts-and-crafts projects,” Ms. Watnik said. “This was already something that I was doing, writing letters to people. But during the pandemic, I realized it’s nice to feel grounded with something materially from another person.”

Ms. Zoeller Newman added that the lockdown had led her to send “thinking of you” letters to other friends whom she doesn’t see often.

“I’ve since been preaching the gospel of letter writing to people during this pandemic,” she said. “It’s such a great way of connection that so many of us have lost, that I think it’s worth reminding people how much a card, letter or note could mean to someone — especially in this world that we’re now living in.”

It’s Tuesday — keep in touch.


Dear Diary:

I was on my way to a luncheon with college classmates while visiting New York last fall, and I wanted to pick up a bottle of wine as a gift for the hostess.

Approaching my destination, I checked my phone for a liquor store in the neighborhood and found one not far away.

Upon entering the store, I saw a prominent display of a sauvignon blanc from New Zealand that cost $15 a bottle.

I explained to the proprietor that I was from Denver, that in Denver dollars the bottle would cost even less and that I wanted to be sure it was an acceptable wine to present to the hostess.

He cut me off.

“Yes,” he said. “You’ll be invited back.”

— Camille Bradford


New York Today is published weekdays around 6 a.m. Sign up here to get it by email. You can also find it at nytoday.com.

We’re experimenting with the format of New York Today. What would you like to see more (or less) of? Post a comment or email us: nytoday@nytimes.com.

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