Diary

Liberals Laugh at Tax Flight Threat

New York state – under the leadership of Governor David Paterson – is getting ready to dramatically raise taxes on those earning greater than $250K. And faced with the threat that people earning this kind of money might move themselves or their businesses to lower-tax jurisdictions, liberals seem completely unconcerned. Indeed – if you take Rush Limbaugh as symbolic of the rest of these high-earners, they seem positively giddy. Jon Stewart takes the same tack as lots of compassionate liberals; he implies that Limbaugh is a homophobic, drug-addict with a taste for murder, and that New York is better off without him.

Governor Paterson is also eager for Rush Limbaugh to get out of town:

Rush Limbaugh is fed up with taxes in New York and with Gov. David A. Paterson in particular. The radio talk-show host denounced the so-called millionaires’ tax in the new state budget and then announced on the air this week that he would be packing up and leaving town…

“If I knew that would be the result,” he said after a speech Thursday morning in Midtown, “I would’ve thought about the taxes earlier.”

Hee hee! That Paterson is a card!

Let’s see if he laughs as hard when top-earners and small businesses start leaving the state. Because while Limbaugh makes a nice punching bag, this isn’t about one person; it’s about the hundreds of thousands of ‘wealthy’ people who face the same decision Limbaugh has made.

As Paterson himself argued just a few weeks ago – when he opposed higher income taxes – raising taxes will drive out jobs. Paterson himself said that 140,000 people leave the state every year, due to New York’s anti-competitive tax structure – which will get worse under his budget plan. It seems that fans of higher income taxes have to test the theory though; some are even trying to argue that raising taxes creates more wealthy people (as if the economy today is the same as it was in 2003).

According to the New York State Department of Taxation and Finance, New York City has more than 86,000 taxpayers earning more than $250,000 annually. The state has more than 200,000 such high earners altogether – and recall that many of these ‘taxpayers’ are likely small businesses. How many will be driven out of the state? How many businesses will close or relocate, and how many jobs will be lost?

Democrats chuckled when they were warned that higher taxes on boat sales threatened the yacht industry; they ended up killing it. And when Rudy Giuliani was elected Mayor of New York City in 1991, taxes were so oppressive that his tax cuts led to tremendous increases in revenue. It looks like Paterson is trying to go back to the future. And it may lead Rudy Giuliani to get elected again – this time as Governor.