Soaking the Rich in New York State?

Sunday’s lead article in The New York Times was titled, “Deal is Reached to Raise Taxes on Top Earners.” It described a deal between “leaders” of the New York legislature to raise taxes on wealthy New Yorkers.

The first thing any veteran of New York State government will note about this article is the reference to “leaders.” Our state government is famous for being one of the most corrupt in the nation, and matters typically get decided by “three people in a room:” the Governor, the head of the State Assembly, and the head of the State Senate.

This year, there’s a slight modification: the Democrats now control the State Senate (albeit by two votes) as well as the State Assembly. This has allowed the implementation of legislation favorable to the average working citizen, and the above is no exception.

Some people have decried the move to increase taxes on the wealthiest New Yorkers as “soaking the rich.” However, it should be noted that the new tax on earners of $500,000 or more is 8.97 percent, the same as New Jersey’s highest rate.

Governor Paterson did well to accede to this legislation, especially in light of the size of the budget gap we’re now facing. Previously, the highest tax rate was applied to those making $40,000 or more a year, so there was definitely room to create additional brackets.