Updates
February 6, 2019: someone agrees with me. Stuart Varney on Fox Business -- the tax exodus has just begun; it will become a flood.
It’s official.
The governor of New York confirms it. The tax exodus has begun.
We've been expecting this.
In New York, a $2.3 billion shortfall in state revenues. Gov. Cuomo blames the new tax law. You can only deduct $10,000 worth of state and local taxes. In high-tax states, that’s a pittance.
Result: Even middle-class people end up paying more tax, and the one-percenters are getting socked. Some of them are moving, and taking their money with them.February 5, 2019: Governor Cuomo changed his story overnight. Am I missing something here? No one is talking about this: Governor Cuomo's earlier complaint was the the Federal "SALT" tax deduction caused the problem. Helloooo! The SALT tax deduction / law was changed in 2018. Folks have not yet filed their 2018 returns. Unless the NY state revenue number that Governor Cuomo is talking about is an estimate he misses the bigger story. I don't know if his 2018 deficit is an estimate or if based on actual figures. Let's assume his comments were based on actual figures If so, those revenue receipts were made in calendar year 2017, not 2018. Again, payments for CY2018 are still coming in. Of course, the excessively rich were paying quarterly estimates. But the bottom line is this: rich New Yorkers were moving out of state well before 2018 and the change in the Federal "SALT" deduction. This did not happen overnight. Rich New Yorkers started their migration some years ago, probably during the Obama administration when the expectation was that Hillary would be elected president. [The New Yorkers knew Hillary much better than the rest of the country.]
So, Cuomo realizes that it was NOT the Federal SALT tax that caused the CURRENT problem. That's why he is changing his story. He does not want to go down that road, now, to increase taxes on the rich because he knows wealthy New Yorkers were leaving even before the change in the Federal tax law.
That was the first of two knock-out punches. Here's the second one.
And on this one, Governor Cuomo is correct. The Federal tax law regarding SALT goes into effect this past year, 2018, and the state will start to see the effects of that law this year, in 2019.
Cuomo sees the past: wealthy New Yorkers leaving the state because NY taxes too high.
Cuomo sees the future: it will get worse. Wealthy New Yorkers now affected by
- high NY taxes
- a NY federal representative that wants to increase taxes on the rich [Rep Occasional-Cortex (D)]
- the state legislature will want to increase taxes on the wealthy before they will make spending cuts
- the Federal "SALT" law
Original Post
The Big Stories.
The Obama years.
The Doomsday Chronicles.
US States.
From Newsday:
Gov. Andrew M. Cuomo on Monday announced a dramatic drop in state income tax revenue of $2.8 billion, which he says will prompt him to revise his 2019-20 budget and reconsider spending on schools, health care and repairs to roads and bridges.
Cuomo, a Democrat, blamed the shortfall on a federal tax plan backed by Republican President Donald Trump. Cuomo said the law's cap on deductions for state and local taxes at $10,000 was to blame and suggested it is, anecdotally, triggering high-earners to leave New York.
“At this point there is no doubt that the budget we put forward is not supported by the revenues,” Cuomo said at a State Capitol news conference. “It’s as serious as a heart attack.”
Cuomo said he’s not certain what areas might need to be cut, but said the biggest spending areas now are education, health care, infrastructure and another phase-in of a previously approved middle-class tax cut.North Dakota Legacy Fund: growing by at least $50 million / month.
Meanwhile, Governor Cuomo bans fracking in upstate New York.
This is not rocket science.