From the folks who brought you New York’s “millionaire tax,” it’s … another millionaire tax.  And a stock transfer tax.  And a 50 percent “Banker Bonu$ Tax.”

Is this a great state, or what?

The income tax hike and stock transfer tax were formally proposed at an Albany news conference this week by the union-dominated coalition that calls itself New Yorkers for Fiscal Fairness — whose members include the powerful New York State United Teachers (NYSUT).

Last year’s state personal income tax (PIT) increase, the largest in New York’s history, temporarily raised the top rate from 6.85 percent to 8.97 percent on taxable incomes over $500,000, but also raised the rate to at least 7.85 percent on filers earning as little as $200,000.

The unions and their non-profit allies (e.g., Environmental Advocates of New York and the Coalition for the Homeless) now say the Legislature should raise the rate another percentage point, to 9.97 percent, on taxable incomes above $1 million.  They say this will generate $1 billion–but if recent experience teaches anything, the actual yield from a soak-the-rich tax will fall well short of the target.  Already, revenues from last year’s gargantuan PIT increase are coming in at least $550 million below the original projection of $4.1 billion.

On top of the PIT, the same coalition is calling for a restoration of the stock transfer tax, at varying rates ranging from 1.25 cents to 5 cents per share.  But, um, wouldn’t this motivate stock traders to, you know, trade stocks somewhere outside the reach of New York’s tax collector?  That possibility isn’t even acknowledged in the “fact sheet” released by proponents of the tax.

Meanwhile, the coalition’s friends in SEIU Local 1199 (United Health Care Workers) want to impose a 50 percent tax on bonuses paid to investment bankers.  Local 1199’s leader claims this “could generate anywhere from $6 to $10 billion for the state to make much needed investments in financially struggling hospitals, nursing homes and schools.”

So how serious are these efforts?  The banker bonus tax at this stage appears to be little more than populist noise-making, which SEIU is promoting through online ads on New York political blogs and newspaper sites.  Even on the federal level, a union-backed stock transfer tax is widely regarded as such an obvious threat to New York’s economy that a Democrat from Staten Island is leading the bipartisan opposition to the tax in Congress.

That leaves the latest version of the millionaire tax.  Of course, it will drive more capital elsewhere and further undermine New York’s growth prospects for the future.  Then again, the same was true of last year’s tax hike–but that didn’t stop Governor Paterson and then-Senate Majority Leader Malcolm Smith from reversing their previous positions and embracing it as part of the final 2009-10 budget deal.

Stay tuned.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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