New York, New York. So nice they tax you twice.
Durning a period with an economy that’s currently booming and almost record-low unemployment rates, you’d expect income tax revenues to be doing pretty well, wouldn’t you? That may be the case in many parts of the country, but not in the Empire State. A recent report from Moody’s caught some people by surprise when they found that tax revenue in New York is actually declining. Considering the fact that it’s one of the highest taxed states in the nation, how can such a thing be? (Newsday)
The fiscal elements of Gov. Andrew M. Cuomo’s budget proposal are a growing concern to several analysts as tax revenue drops and spending increases, even as most of the attention to the proposal has been on high-profile policy issues such as abortion rights and gun control.
Moody’s Investors Service, which has given high marks for Cuomo’s handling of state finances, warns in a report to investors that income tax collections were “down sharply” in December, as in other states, in what analyst are calling “December surprises.”
Personal income tax collections in New York were $2.8 billion less than a year ago, prompting the Cuomo administration to lower forecasts in its $175.2 billion budget proposal for the 2018-20 fiscal year beginning April 1.
Both the Governor and his allies in the media are writing this off to a number of different economic factors, and most of these are probably contributing to the problem. They involve things like volatility in the stock market and people filing their taxes early to beat the new tax law which places limits on some deductions.
What neither the Governor nor these analysts are admitting to in public is the reality that New York is experiencing an exodus of both wealthy and working-class people. It’s been regularly reported that New York is among the fasting shrinking states, with a ten-year net population growth of only 3.3%. (Compare that with Utah, where they saw a 20.8% growth in population over the same period.)
Compounding the issue is the fact that the majority of people who are leaving come from both the wealthier end of the spectrum and the upper middle class. The only reason the population isn’t plummeting is that the state (in particular the Big Apple) continues to take in large numbers of new immigrants, both legal and illegal, who don’t tend to earn as much money or pay as much in taxes.
Why do you suppose the people fleeing the state tend to be the ones who are better off? You don’t suppose it could be the Democrats’ agenda of high taxes and suppression of freedoms such as gun rights, do you? Naw. I’m sure that can’t be it. You just keep on whistling past the graveyard, Governor Cuomo. After the next census, your state will lose yet another congressional district, if not two.