‘Occupy’ Movement Rekindles New York Millionaires’ Tax Debate

By: - November 1, 2011 12:00 am

While populist protesters are occupying Wall Street, a more consequential debate on income inequality and taxes is taking place 150 miles to the north, in Albany. There, with New York’s temporary tax increase on high-income earners set to expireat the end of December, both activists and lawmakers sympathetic to them are trying toextend the surcharge. They face one huge obstacle:Democratic Governor Andrew Cuomo, who has pledged for months that he would let the “millionaires’ tax”die.

At issue are two higher income tax brackets — on individuals making at least $200,000 a year and those earning $500,000 a year, respectively -that lawmakers agreed to in 2009as a way to help balance the budget. Most Democrats in the legislature, including Assembly Speaker Sheldon Silver, have called for the taxes to be extended in some form. Cuomo, with the help of the New York Senate’s Republican majority, rebuffed that effort when the state wrote its budget this spring, instead choosing to limit spending on education and Medicaid. With New York expected to face a new budget shortfall next year, however, Silver is continuing topitch a plan that would extend higher rates for individuals who make $1 million a year or more.

Now those efforts are getting support from the Occupy Wall Street movement and its offshoots.Even as snow fell in New York this weekend, a small group of protesters remained in tents in Albany’s Academy Park that they have named “Cuomoville,” the Albany Times Unionreported . Cuomo, however, insists he won’t be persuaded, arguing thatan extension of thetax would drive wealthy New Yorkers from the state.

The debate comes with large stakes for Cuomo, one of the most popular governors in the country and a possible presidential candidate in 2016. In his first year in office, Cuomo has won praise from progressives for shepherding gay marriage legislation to passage and received high marks even from some Republicans for an on-time budget that reduced projected deficits for years to come. On the millionaires’ tax, however, most of Cuomo’s Democratic base and, in fact, most New Yorkers, are against him. A poll from Quinnipiac Universitylast week found majorities of Democrats, Republicans and independents all favoring continuation of the higher tax, even as it found Cuomo retaining a 65 percent approval rating. 

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Josh Goodman

Josh Goodman helps lead research on fiscal management and place-based economic development programs as part of Pew’s state fiscal health project. Goodman has served as a primary author for Pew studies that examine how states should evaluate tax incentives and maintain budget discipline when implementing those incentives.