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An old English saying is "do not kill the goose that lays the golden eggs." One interpretation of the saying is do not harm or destroy the person that gives them their money, power or advantage.
New York State is known for its relatively high income tax rates on people who make a lot of money.
Interestingly, New York's highest income tax rates came under a Republican governor, Nelson Rockefeller, and a Republican Legislature in the late 1960s and early 1970s.
E. J. McMahon, a founding senior fellow of the Empire Center for Public Policy, an independent, non-profit, non-partisan think tank based in Albany, New York, wrote: "the double-digit tax rates imposed in the 1960s and early 1970s under Republican Governor, Nelson Rockefeller struck a huge blow to the state's economic competitiveness."
McMahon's article, written upon the death of former Democratic Governor Mario Cuomo, pointed out: "Democratic Governor Hugh Carey, under whom Cuomo served as lieutenant governor... began to undo the damage by slashing the state's top income tax rate to 10% from its 15.35% Rockefeller-era reform." At times in the 1970s New York State also imposed a 10% surtax on the 15.35%, bringing New York's top income tax rate to a crushing 17%.
Under Governors Hugh Carey and Mario Cuomo the top rate got down to 9%.
In more recent years New York had a top income tax rate of 8.82%. That rate was competitive with other high tax states such as New Jersey, California, Connecticut and Massachusetts.
New York State then added a "temporary" "millionaires" tax of from 9.65% to 10.9% that was supposed to end in 2017, but did not. This "temporary" high tax rate is now to continue through 2027 when New York is supposed to go back to a top rate of 8.82% in 2028.
The timing of the "temporary" "millionaires" tax was a disaster. In 2017, under President Trump and a Republican Congress the unlimited Federal Income Tax deduction for State income taxes and local property taxes (SALT deduction) part of the Income Tax Law since 1913, came to an end.
New Yorkers such as surgeons, Wall Street bankers, chief executive officers, and partners in big law firms, who prior to 2017 paid the 9% New York State income tax rate, benefitted from an itemized Federal Income Tax deduction of about $90,000. In a
Federal tax bracket of about 40%, those New Yorkers saved about $36,000, reducing their "net" New York tax rate to 5.4%.
No longer.
The impact of the continuing "temporary" "millionaires" tax plus the virtual elimination of the State income tax and local property tax (SALT) deduction has driven thousands of high earners out of New York State in the last 3 years.
Few of us feel "sorry" for New Yorkers who make $1,000,000 or more a year. The high New York State income taxes driving them out of our State, however, hurts the regular earners here in Chautauqua County.
Governor Hochul so far has resisted those in the State Legislature who demand even higher tax rates on high earners so that they will pay their "fair share" of taxes.
When high income individuals in Florida and Texas pay $0 in state income taxes, it is hard to understand how a New Yorker already paying a State income tax rate between 9.65% and 10.9% are not already paying their "fair share" of New York's taxes.
Instead of raising the tax rate even further (and driving even more high earners out of New York), it would benefit New York State in 2024 and beyond to finally end the "temporary" "millionaires" tax and restore the top tax rate of 8.82% now instead of waiting until 2028.
It ultimately is in New York's interest to kill as few geese as possible (or chase as few of them as possible to Florida) that lay golden eggs for the State of New York year after year.
Fred Larson is a graduate of the Princeton University Woodrow Wilson School Of Public and International Affairs, operated his own private law practice from 1977-2014 and is a retired City Court judge.