Governors of California and New York Encourage Employers to Kindly Leave


Posted by Patrick Gleason on Wednesday, December 7th, 2011, 4:09 PM PERMALINK


The governors of California and New York, respectively the 1st and 3rd most populace states in the union, have proposed massive tax increases in the last few days.

In California, Gov. Jerry Brown was unable to pass the largest state tax increase in U.S. history earlier this year because legislative Republicans, whose votes were needed due to California's 2/3rds vote requirement to raise taxes, kept their pledge to constituents to oppose any and all efforts to raise taxes. So Brown is now going out to collect signatures, with financial backing of government sector unions and Hollywood, to put an income and sales tax hike on the ballot. (Side note: Brown should hire ATR to consult him, because as we told him back in January, his tax hikes wouldn’t get through the legislature and he would save himself time and embarrassment by just going and getting the requisite signatures.) California has the 6th highest state and local tax burden in the country. If Brown has his way, California families and employers will be the nation’s most heavily taxed.

In New York, Gov. Andrew Cuomo’s vow to not raise taxes apparently only had a shelf life of less than a year. Cuomo recently proposed a massive income tax increase that will serve to make state revenues more volatile and unpredictable. Today’s Wall Street Journal lays out how Cuomo’s plan will make New York’s income tax more progressive:

“Mr. Cuomo is also tossing out the most desirable part of New York's tax code, which is its relative flatness, with a top income tax rate that would have been 6.85% next year (after the previous surcharge expires). The new code will include a "progressive" ladder: 6.45% for couples earning between $40,000 and $150,000, 6.65% from $150,000 to $300,000, 6.85% from $300,000 to $2 million, and 8.82% above $2 million ($1 million for individuals).”

Upon coming into office at the beginning of this year, Cuomo remarked that New York has no future as the tax capital of the nation. That assessment is just as applicable, if not more so, today as it was in January.

Liberals hate it when we say that these states have a spending problem and not a revenue problem, but the data makes clear that is in fact the case. Let’s take a look at the numbers:

Over the last 10 years, had California kept spending in line with population growth and inflation, the Golden State would have spent over $230 billion less than it did and would be sitting on a sizable surplus. Same goes for New York, which would’ve spent over $130 billion less over the last decade had lawmakers in Albany simply kept spending in line with population and inflation.

What do you think? Will continuing their strategy of hiking taxes on families and employers while ignoring out-of-control spending work out well for New York and California?

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