Governor Kathy Hochul has no interest in raising taxes on New York’s richest, saying during a Thursday interview that the well-heeled will take off for other states.
“I’m not interested in driving people out of this state. I believe that we have the right balance right now,” Hochul said in a webinar hosted by City and State on Nov. 4.
The governor echoed talking points of her predecessor Andrew Cuomo, saying if asked to pay more in taxes, deep-pocketed residents would leave the Empire State for Florida, which has no state income tax.
“Those individuals, high-net-worth individuals, allow us to have the revenue generated as well as their many philanthropic contributions that I need to be able to support the progressive programs I want to have funded,” she said. “Having them live in Florida and become Florida residents does not help us.”
The state’s chief executive said she’s been on calls with business bigwigs trying to convince them to stay in New York to help with the recovery from the COVID-19 pandemic.
“I’m attracting people to the state, literally calling CEOs who might be on the hook, I guess I have to reel ‘em in,” she said. “I’m not going to take any steps that are going to hinder my ability to promote New York State as a great place to bring your business or your existing business to expand, I can continue hiring more people, have a more robust recovery, and raising taxes right now will not accomplish that.”
While Hochul frequently tried to draw distinctions between herself and her disgraced predecessor during the virtual interview by emphasizing collaboration with the legislature on other issues, she was more direct in her opposition to wealth taxes and relied heavily on arguments ex-Governor Cuomo used to fend off similar recent efforts.
“My priorities continue making sure that people do not view New York State as a high tax and spend state, that reputation did not serve us well during the years I was growing up,” Hochul said.
Progressive and leftist lawmakers and groups like the Democratic Socialists of America have in recent years been pushing to increase taxes on the rich through various proposals, including a wealth tax, a levy on second homes known as a pied-à-terre tax, and stock transfer taxes.
Cuomo was steadfast against the proposals, punting to the federal government and saying the rich would “just move next door” to a different state, a common refrain among politicians and business leaders.
While some prominent people have relocated to the Sunshine State — including former President Donald Trump — the argument has been called into question in recent years by studies and analyses that show millionaires tend to move at lower rates compared to middle- and low-income people population, because top earners are more likely to be older, have families, and businesses that tie them to a location.
Some rich people do move to lower tax states, particularly Florida, but researchers found the rate of millionaire migration to be extremely low.
One Brooklyn lawmaker and advocate for increasing taxes on the wealthy said she was disappointed by Hochul’s statements.
“Cuomo’s legacy, what he was really known for, was this culture of austerity that really deeply harmed working-class communities across the state,” Assembly Member Emily Gallagher told amNewYork Metro. “To claim that these old arguments are still valid, it’s very disheartening to hear that that’s where we’re still sitting when we are still in crisis.”
“I hope that she won’t let old stories determine our new future,” the north Brooklyn legislator added.
In the 2021 budget negotiations in April, progressive and leftist lawmakers were able to secure temporary tax hikes on those making almost $1.1 million and the top bracket for those earning incomes over $25 million.
This year’s fiscal spending plan also gained billions of dollars in support from the federal government and was able to establish a $2.1 billion fund for excluded workers and $2.4 billion in rental assistance.
Taxes on the rich will very likely come up again during the 2022 budget negotiations with the state Senate and Assembly this spring, at the same time that Hochul will be courting voters to keep her seat in the Democratic primary against challengers like State Attorney Letitia James.
Gallagher vowed to push for bills that didn’t make it into the last budget next spring.
“This year really proved how much success we can have by increasing revenue,” she said. “We’re definitely not giving up on that whole package.”
