Cuomo calls $2.3-billion drop in revenue a 'heart attack'

The state of New York may be falling behind some states when it comes to quality of life issues.  But there's one category where New York excels: taxing its citizens.

New York leads the nation in taxes, a dubious distinction not lost on wealthy residents of the state.  So it's puzzling why the governor would be surprised when expected revenues fall a little short; about $2.3 billion short.

New York Post:

Cuomo attributed the revenue drop in December and January largely to the new federal tax code, as well as volatility in the stock market and other uncertainties.

"That's a $2.3 billion drop in revenues. That's as serious as a heart attack. This is worse than we had anticipated," the governor said in Albany.

"This reduction must be addressed in this year's budget."

In a rare joint appearance with Cuomo, state Comptroller Tom DiNapoli confirmed the deteriorating finances.

"This is the most serious revenue shock the state has faced in many years," he said.

He urged Cuomo and the Legislature to sock more money away in the state's rainy day fund to prepare for the worst.

Cuomo had planned to spend $176 billion – including about $100 billion in federal funds – in the new fiscal year that starts on April 1.

Cuomo's preliminary analysis claims much of the impact is coming from a drop in revenues from the state's highest income earners most impacted by the loss of write-offs of state and local tax deductions, known as SALT.

It isn't just the loss of write-offs, although that may have contributed to another problem that Cuomo mentioned in passing:

The loss of revenue from New York's wealthiest puts New York in a bind because the state relies on a progressive income tax system that taxes the rich at a higher rate.

One percent of the state's top income earners provide 46 percent of the state's personal income tax revenues, officials said.

Cuomo said Albany can't go to the well and tax the wealthy again because that would only worsen the situation, citing "anecdotal" evidence that high-income New Yorkers are already fleeing the state to lower-tax jurisdictions.

He offered no figures to back up the claim.

A pretty good figure is that $2.3-billion budget shortfall.  The rich can't pay taxes if they're not there.  Cuomo's state government is giving them every possible incentive to leave.

Now imagine America after Elizabeth Warren and Alexandria Ocasio-Cortez  get their wish and pass "wealth taxes." The top 1% of taxpayers pay 40% of all individual taxes.  The confident predictions of revenue from that "wealth tax" will almost certainly fall far short of expectations.

How do we know?  Because it has always been that way.

Socialists like Ocasio-Cortez and Warren are simply incapable of grasping this simple, basic economic concept.  But it certainly plays well with the public, who loves the idea of sticking it to the rich – even though it's the public who will be stuck.