Thanks governor, I really needed that tax cut
Truth is stranger and generally more perverse than fiction. That’s why the reader knows that a tax cut for New Yorkers with an annual income in the range of $300,000 to $2 million is neither a nightmare nor the product of The Weekender’s fertile imagination, but fact. Correction, it is a nightmare, but one that actually became the law of our state in a signature performance by Gov. Andrew Cuomo.
The governor has had a good year by almost any measure. However, his tax initiative, in which he mocked the democratic process and dismissed criticism of that mockery in a glib and disingenuous fashion, is surely the low point in this year, indeed, in many years of poor governance in New York state.
The state and its governor, like every other governor, and the nation’s chief executive are confronted by essentially the same problem. Their budgets are badly out of balance, with the surpluses that the federal government and some states experienced during the Clinton years seeming like something which happened “million of years ago in a galaxy far far away.” The demand for government services has not abated. Indeed, it has increased. Infrastructure is in need of repair and replacement. The barely expanding economy means that tax revenues are inadequate to meet expenditures unless there are massive cutbacks in programs and services deemed essential — public education being just one.
Something and, indeed, two things have to give on the expenditure and revenue (tax) sides. The state needed more tax revenue and had to raise someone’s or everyone’s taxes by raising rates or by enacting new levies.
The decision of our governor was raise taxes on just one tiny group, that being families with incomes of more than $2 million annually and lower everyone else’s taxes, with a net annual revenue increase projected to be $1.9 billion. How tiny was the targeted group? To understand one must push beyond “the 1 percent” rhetoric that has become so common since Occupy Wall Street and the proliferation of occupations around the country. The annual income threshold to enter the 1 percent is about $344,000, according to the IRS. But at $1 million in annual household income, a family is in the top one-sixth of 1 percent, or wealthier than 599 out of every 600 families. When we approach the $2 million a year Cuomo-cutoff, we see people with income not just in the top 1 percent but the top one-tenth of 1 percent or the top thousandth. Cuomo decided that people near the $300,000 entrance to the top 1 percent and those all the way to that top thousandth really needed a tax break. Thanks governor, I really really needed that extra dough.
The Weekender lived most of his life among the 99 percent. I accompanied my mother to collect unemployment checks and remember when my dad was out of work. I reached my mid-30s supervising 23 lawyers for a salary of $22,000. But in late middle age, I happily entered and reside in the land of the 1 percent. Like most red blooded Americans who stroll “down the avenue, Fifth Avenue” up Main Street, Chatham or navigate the maze-like corridors of Crossgates Mall, I can convince myself that there are many important ways to spend that extra $27,000 (or so I figure) this tax break will mean to me. But that is just the product of a junk food induced stupor. The truth is that I don’t really need any substantial material thing that I hadn’t acquired long ago and if I really do, my income net of the pre-Cuomo tax break is sufficient for me to buy it.
One can quibble and debate where the cut-off for the Cuomo tax break versus the Cuomo tax hike should have been set, but there is no respectable point of view that would put it at $300,000, let alone $2 million annually. A good argument, and one I would make, would have placed it right in the middle at roughly $33,000 a year — the median point above which half of America lives and below which the other half resides. Remember America how “the other half lives.” As The Hollies intoned, “they ain’t heavy they’re your brothers.”
As bad or worse (if that is possible) than the tax law itself was the governor’s modus operandi for enactment. The law was negotiated without public awareness or comment by the notorious “three men in a room” and some of the governor’s, speaker’s and majority leader’s aides. The three-day waiting period between a bill’s introduction and the vote, designed to allow deliberation and public input, was waived, as is becoming SOP for this governor. (See The Weekender’s criticism of Governor Spitzer for doing the same thing in the enactment of his first and only budget, in “Journal of the Plague Year,” Page 86, Kaplan, 2010). The 33-page bill was posted online a full 26 minutes before the sheep masquerading as legislators voted 55-0 in the Senate and 132-8 in the Assembly to pass it, most certainly in most cases without reading it. The governor claimed that the law was in fact the product of three years of open and robust debate, saying “If you have not heard discussion on the millionaire’s tax, you have been living under a rock for the past three years.” Here, Cuomo dishonestly asserted that the discussion had culminated in a consensus that not just millionaires (net worth of at least $1 million), but people earning $2 million annually needed to have their taxes reduced.
Of this process, Assemblyman Jim Tedisco aptly said, “I think it’s as bad as you can get in terms of reneging on a promise to be more open, more transparent …” But the new law and the process were also lauded by some in Albany and most strangely by capital ethics maven David Grandeau, who said, “you have to give the guy credit for the way he pulls things off … you can argue that it’s not good for democracy … but if you really want to be honest with yourself, the greatest form of government to accomplish things is a dictatorship. Democracy is a pain.” Oh really David, perhaps you might volunteer to tell that to the people in Tiananmen and Tahrir Squares. Grandeau was joined by many other politicians who praised Cuomo for, in essence, “getting the trains to run on time.”
One of The Weekender’s most painful political memories was of the 1992 U.S. Senate campaign where as “issues director” for Bob Abrams, I heard my candidate call his opponent, Alphonse D’Amato, a “Fascist” during the week when Italian-Americans celebrate Columbus Day. Wishing to avoid the same fate that befell Bob after that unfortunate breach of etiquette, let’s just say that Cuomo last week reminded me of once and future Russian President Putin. Vladimir and his toady Parliament must have once done something as bad as Cuomo and our legislature did and similarly in a secretive and dictatorial fashion.
Thanks governor, I really needed that tax cut