Taxing Tuesday: Let's Tax the Rich in NY! It Will Really Work This Time!

But don't ask how much money they will get from this. That would be rude.

Mary Pat Campbell

Jan 25, 2023

Yes, I’m bringing back Taxing Tuesday! (four weeks into 2023, but I’m bringing it back)

It may not be every week, but I saw a story, and I knew I had to bring it back.

Taxing the rich in New York — We’ve never made it work before, but this time it will work, we promise

I may as well capture this story before this bill dies an ignominious death in committee(s).

via ThinkAdvisor: New Bill Would Raise Capital Gains Tax on Wealthy New Yorkers

A New York state legislator wants high-income, high-net-worth state residents to pay more taxes on capital gains.
Sen. Gustavo Rivera, D-N.Y., introduced S. 2162 Thursday. The bill that would impose an additional state income tax ranging from 7.5% to 15% on the long-term capital gains of taxpayers with New York state taxable income over a minimum level.
In New York, capital gains are taxed as income, at marginal rates from 4% to 10.9%.
Fund Our Future, a tax policy project associated with State Innovation Exchange and the State Revenue Alliance, promoted that bill, along with tax bills introduced in California, Connecticut, Hawaii, Illinois, Maryland, Minnesota and Washington state, at a press conference Thursday [January 19, 2023].

Oh, sorry, not only in New York, but also in other high-tax states, which will go over really well, especially as the SALT cap is still in place.

This will be a hoot and a half.

As with the ginormous retirement age protests in France, I didn’t hear much about this Tax The Rich announcement last Thursday, so let me see if I can find more press coverage (or at least their press releases).

Press Release from Fund Our Future aka Make the Rich Pay

January 19, 2023 press release:

— State legislators from CA, CT, HI, IL, MN, NY, MD, and WA today announced the
first-ever coordinated effort to pass wealth tax legislation and simultaneously introduced bills that
would ensure the ultra-wealthy pay what they owe toward funding critical healthcare and
education programs, among other priorities. The bills include proposals for estate, capital gains,
and unrealized gains taxes seeking to put a check on billionaires and redirect much-needed
resources to our communities.
The eight-state legislator cohort is part of a new campaign, Fund Our Future, spearheaded by SiX
Action – the 501c4 arm of the State Innovation Exchange – and the State Revenue Alliance. Over
a year in the making, the campaign demonstrates that state legislatures are leading the charge in
enacting transformational policies on key issues of the day, including tax justice, where the
federal government has been unable to act.
State legislators from California, Illinois, New York, and Washington were joined today by U.S.
Rep. Pramila Jayapal and tax economist Emmanuel Saez on a press call about the
announcement. Speakers discussed each piece of legislation in detail and covered both the
misconceptions and opportunities surrounding tax justice. The cohort also unveiled new polling
demonstrating vast majority support for these policies from voters. The recording can be viewed
here and TargetSmart polling across states can be found here.

Ooooh, the wealth tax on unrealized gains is back! How deliciously idiotic!

Photo by The New York Public Library on Unsplash

But what I really appreciate is they make it easy for a blogger like me: they keep a spreadsheet of their media coverage. Thanks!

They did miss the NY-only ThinkAdvisor piece, but that’s okay.

I don’t feel like linking the others right now. You can follow the links and click if you wish.

Any word on the SALT cap?

So the obvious thing that comes to my mind is the SALT (state and local tax) cap, which has been biting several high-income folks in the specifically-targeted states for this legislation.

While the argument is, “We’re targeting only the really, really high-wealth people, not necessarily the high-income people like you poor doctors and lawyers who are our core constituency”, and while the Republicans just barely control the House of Representatives (and thus the SALT cap will not be touched for now), I do wonder if any of the Democrats have brought up the SALT cap lately.

Because that would be interesting to note.

I went to a local political Q&A this past weekend, and it was lively (and mainly Democrats). The main topics were focused on zoning/development issues, as well as electricity/services. I didn’t hear about taxes much. I guess people have absorbed the SALT cap issue for now.

I did a news search on “SALT cap” and came up with this item as the most recent — Mike Lawler is my representative. He replaced Sean Patrick Maloney, the Democrat.

‘We need a bipartisan solution:’ Rep. Lawler takes aim at SALT deduction cap for married couples
Rep. Mike Lawler is taking aim at the State and Local Tax cap for married people in his first piece of legislation as a congressman.
“This has been a bipartisan failure, and we need a bipartisan solution to fix it,” he says. “I think this is a fair measure that we could take and frankly, all of my colleagues should support, and I encourage them to do so.”
Lawler introduced the SALT Marriage Penalty Elimination Act in New City with the support of Rockland’s town supervisors and Rockland County Executive Ed Day.
“My support will obviously be there for the people of Rockland County so we do not get treated unfairly, which is exactly what has been going on up until now,” Day says.
If passed into law, Lawler’s legislation would allow married couples who file joint returns to deduct up to $20,000 of SALT on their federal income tax.
Currently, those who file for a SALT deduction as single or married are both capped at $10,000.
Lawler says his proposal has bipartisan support in congress.

I obviously have a direct interest in this. I am currently affected by the SALT cap, and would immediately get $10K increase in my SALT deduction. I go over the SALT cap by a lot.

Lawler has a piece in lohud.com here, which says the same thing.

I wish him well, and it seems like this may be likely to pass, even in this Congress. We’ll see.

The others, on the other hand — it’s mainly for show, I’d say. Even in New York state, there would be issues. (Especially in New York state, in a year where bonuses on Wall Street are down and layoffs are up…. it will be a very hard sell.)

one unknown man standing beside wall street staton downtown and Brooklyn signboard — Photo by Woldai Wagner on Unsplash

STUMP - Meep on public finance, pensions, mortality and more

Discussion about this post