State’s Tax System Will Drive Wealthy Away
Many of our readers have a friend or family member who chose not to return to Chautauqua County because there were better job opportunities elsewhere.
As difficult as it is for local residents to have their families spread across the country, the situation could get even worse depending on how New York’s elected react to a possible $4.1 billion budget deficit. Thomas DiNapoli, state comptroller, has been saying for months that the gap could happen due to a combination of below average tax receipts, projected budget gaps and federal funding cuts.
While it should go without saying that new spending in the 2018-19 state budget should be examined carefully in light of DiNapoli’s warnings, the Wall Street Journal and Empire Center for New York Policy are making a compelling case for legislators and Gov. Andrew Cuomo to keep a careful eye on taxes, too. The Wall Street Journal recently wrote an editorial “The Great Progressive Tax Escape” which discussed population loss among the nation’s highest-taxed states, particularly among those states’ wealthiest residents. The Empire Center took the Wall Street Journal’s analysis a step further. Using Tax Department statistics, the Empire Center paints a harrowing picture of what happens if the highly wealthy residents of New York state shift their businesses to states with better tax climates.
According to the Empire Center, the latest official data from the state tax department in 2015 showed there were 2,531 New York resident personal income tax filers with AGIs of $10 million or more who paid $6.94 billion in taxes — or 19 percent of the total state income tax paid by all New York residents that year. The taxes on those 2,531 people was enough to pay about 30 percent of state aid to local schools in 2015. If 10 percent of those households — 253 tax filers in all — leave the state, the revenue loss would come to about $694 million.
Such a top-heavy taxpaying burden should give pause to those who would further increase state taxes. The state’s tax and regulatory policies have already forced large portions of the state’s rural population to leave over the past couple of decades. We hope policy makers are cognizant of their reliance on the wealthiest state residents, too. If those wealthy taxpayers leave, the whole system could well collapse.