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We All Should Be Watching These Tax Proposals Carefully

Gov. Andrew Cuomo finds himself in a sticky wicket as state legislators deliberate on the governor’s 2020-21 budget proposal.

There have been several proposals from Democrats in the state Legislature to raise taxes on the wealthy.

A.9650, sponsored by Assemblyman Harvey Epstein, D-New York City, would impose an additional 2% sales tax on retail sales of motor vehicles costing more than $50,000, jewelry costing more than $5,000 and clothing, footwear, handbags, luggage, umbrellas, wallets or watches sold for more than $1,000. Assemblyman Robert Carroll, D-Windsor Terrace, introduced A.9045 to reinstate the sales tax on yachts costing more than $230,000 after an exemption was placed on such vessels in the 2015 state budget while also introducing A.9053 to again collect sales and compensating taxes on some private, non-commercial aircraft. Sen. Jennifer Metzger, D-Middletown, proposed S.7629 to impose a tax on all corporate stock buybacks of issued shares and Sen. James Sanders, D-New York City, has introduced the Millionaire’s Tax and Economic Equity Act of 2020 to extend the top tax state income tax rate to 11.82% for taxpayers who earn more than $100 million.

If Democratic majorities in the state Senate and Assembly pass those bills, it puts Cuomo in a tough spot. Only one year ago, while railing against President Donald Trump’s $10,000 cap on state and local tax deductions (SALT) cap, Cuomo railed about the SALT cap’s impact on high-wage earners.

“Our tax base is getting more diversified, however SALT impacts progressive tax policies disproportionately,” Cuomo said to The Hill. “SALT encourages high-income New Yorkers to move to other states and if even a small number of high-income taxpayers leave the state, it would harm state revenues and impact critical funding for education, health care, infrastructure and the middle-class tax cuts.”

The governor was right last year to seek to protect the state’s high-wage earners and his logic should apply now.

State Democrats’ desire to raise taxes on the state’s richest citizens could help close the state’s $6.1 billion budget gap. It could also push even more high-wage earners out of New York state. What the Democrats could well create is a state in which low-wage upstate residents are moving to Pennsylvania, which is the destination for most Chautauqua County residents who leave the county, while high-wage earners downstate move to Florida or other states with more favorable tax climates.

There are a lot of us here in Chautauqua County who will never buy a $230,000 yacht or a personal aircraft. Why should The Post-Journal care about those with such expensive tastes? Chautauqua County should care because the people who typically buy summer homes in our county would be affected. More importantly, if enough high-wage taxpayers leave, that means the rest of us will be paying the taxes they leave behind. Instead of taxing expensive jewelry, yachts and planes, the state will start increasing taxes on gasoline-burning vehicles, sales taxes on anything and everything that can be taxed and, yes, income taxes on the middle class.

Watch these proposals carefully. You might be next.

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