By Kenneth Lovett on NY Daily News
Two groups of New York millionaires have a solution to the state’s $4.4 billion budget deficit — raise our taxes.
“Raising taxes on upper-income New Yorkers like us is the right thing to do morally,” a coalition of at least 33 millionaires wrote in a letter to be sent Tuesday to Gov. Cuomo and legislative leaders.
The 33 are part of two groups, Patriotic Millionaires and Responsible Wealth, that wrote the state “can and must do more to invest in the state’s unmet needs, and we believe wealthy taxpayers like us should be part of the solution.”
The letter hits the state for not meeting a court order to provide needy schools that were traditionally underfunded billions of dollars more in aid, an obligation Cuomo has repeatedly argued has been met.
It also focused on what the millionaires called an underinvestment in social services, including the growing homeless crisis, and infrastructure.
“We have a way of funding these possibilities: tax us,” the groups, who will hold a press conference Tuesday at the state Capitol, wrote.
Among the signers are documentary filmmaker Abigail Disney, philanthropist Ann Loeb, businessman and former YES Network chairman Leo Hindery, Kaplan & Company founding partner Robbie Kaplan, former BlackRock managing director Morris Pearl, and former lieutenant governor candidate Dennis Mehiel, who made his fortune in the cardboard business.
“We are asking you to tax upper-income individuals like us, those who have who have benefited the most from the systems in place in New York and from the recent federal tax cuts, and who have the greatest ability to pay more,” they said.
They also dismissed the argument that raising taxes on the wealthy will lead to a mass exodus of millionaires form the state.
The groups say the number of millionaires in the state has risen dramatically since 2009 when a tax on the temporary tax on the wealthy was first enacted. Cuomo when first taking office in 2011 said he would not renew the “millionaires tax” but ultimately did, albeit at a slightly lower rate.
“Paying higher taxes will not affect our individual standard of living, but it will contribute significantly to the state’s revenue and ability to meet its needs,” the millionaires wrote.
The letter urges Cuomo and the Legislature to add new higher rates and brackets for households making over $2 million, $5 million, $10 million, $50 million and $100 million per year. They say it could raise between $2 billion and $2 billion a year or more, depending on the tax rates.
The group is also calling for the closure of a $3.5 billion carried interest loophole that lets managers of private equity funds and hedge funds pay taxes at the low rate that applies to capital gains, something Cuomo has proposed.
And it wants a state-level plan to “recapture” some of the savings large corporations are receiving through the new federal tax law, something Cuomo has proposed in his budget.
Senate Republican spokesman Scott Reif quickly dismissed the call.
“We support cutting taxes, not raising them,” Reif said.
A Cuomo spokesman said only that the administration will review the letter.
Assembly Democratic spokesman Michael Whyland said that “we’re taking a close look at all these proposals” and that the chamber’s budget plan reflecting the majority conference’s priorities will be released on Monday.
Kathryn Wylde, of the Partnership for New York City, opposes the idea of raising taxes on the wealthy, especially because the new federal tax bill hits some of New York’s high earners hard by rolling back much of the deductability of state and local taxes.
“This proposal (by the group of millionaires) is neither timely nor rational,” Wylde said.
“It would be interesting to look at their tax returns to see how it compares with people who don’t depend on investment income and inherited wealth, but people who get a salary.”
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