[SouthSky]

'Millionaire's Tax' Could Fund NYC Mass Transit


Democrats' Answer To Congestion Pricing: Tax Anyone Working In State Making $1 Million-Plus

http://llnw.static.cbslocal.com/Themes/CBS/_resources/img/ico010x010clock.gif Apr 8, 2008 6:47 pm US/Eastern
WCBS TV New York, NY

http://llnw.image.cbslocal.com/29/2007/09/12/75x56/kramer.jpg
Reporting
Marcia Kramer

ALBANY (CBS) ― Mayor Michael Bloomberg's congestion pricing plan may be dead, but Assembly Democrats do have a plan to raise money for mass transit: tax the rich.

It's what Albany calls a "millionaire's tax."

Yes, billionaires like Bloomberg will ante up, too.

Under the plan, people who earn over $1 million in New York state will pay an income tax surcharge of about 3/4 of 1 percent for five years. In all, it would raise over $5 billion for mass transit.

Supporters say that of the 75,000 affected taxpayers, about 35,000 don't live in New York.

"They could be ballplayers at Yankee Stadium, Shea Stadium, Madison Square Garden," Assembly Speaker Sheldon Silver told CBS 2 HD. "They could be Wall Street people who live in Greenwich, Conn., or Princeton, N.J."

And with everyone scratching their heads Tuesday about how to fund mass transit, Gov. David Paterson named former MTA Chairman Richard Ravitch to head a commission to look for revenues.

"I am announcing there will be a blue ribbon commission," Paterson said.

Ravitch told CBS 2 HD that he's up to the challenge.

"Obviously, it's a tougher task with the defeat of congestion pricing because that would have provided 20 percent of what the apparent needs are," he said.

Although Bloomberg wouldn't support the so-called "millionaire's tax," Ravitch is open to it.

"Any revenue – any hockable, borrowable revenue – is a good thing," he said. "I take it any way the Legislature wants to give it to me."

Commuters are thrilled with the idea.

"It's a good thing – they should pay their fair share," Manhattan resident Michael Neal said.

Added Manhattan resident Janice Bastuni: "I think it would be a wonderful thing to pay. The mass transit system needs it."

And an interesting side note: 18 percent of the new revenue would come from the 426 taxpayers who make more than $35 million a year, with Bloomberg, of course, being one of them.

---

I guess it's got to be funded somehow, but it does set some new precedents.

Just a question: However, why tax the people that don't use it?
What are your thoughts?

[urbanfan89]

Just a question: However, why tax the people that don't use it?
What are your thoughts?

Because they are more likely to drive and take up precious road and parking space in Lower Manhattan, in an environment that is completely unsuited to driving commuters, they need to pay some of the costs they cause the city in terms of air pollution, congestion that delays goods delivery, parking space that would have been precious office space in Lower Manhattan thus depriving NYC of revenue, and so forth.

[SouthSky]

I'm playing devil's advocate here:

So 75,000 people in a city that has millions upon millions get to pay?

[brian_b]

Terrible idea.

And I have a bridge to sell to anyone that thinks this tax will go away after 5 years, like they claim.

[brian_b]

Because they are more likely to drive and take up precious road and parking space in Lower Manhattan, in an environment that is completely unsuited to driving commuters, they need to pay some of the costs they cause the city in terms of air pollution, congestion that delays goods delivery, parking space that would have been precious office space in Lower Manhattan thus depriving NYC of revenue, and so forth.

Why do you think they are more likely to drive? Because they make a lot of money?

I know a bunch of rich lawyers who work in downtown Chicago and live in the suburbs. The vast majority of them take the train because their time is way too valuable to waste it in traffic. They can multitask and work on the train while someone else drives...

[miketoronto]

That many people make over a million?

The only reason I say this is a good idea eventhough many of them don't use transit, is because they have to pay for the pollution they are causing.

People making that much money can sometimes tend to be snobby, and eventhough they can use transit, they don't. So make them pay for the pollution, traffic, and negative effects their lifestyle has on society.

There was a time when rich took transit.

[quobobo]

Revolutionary idea: maybe, just maybe, in a city as dense and transit-centric as NYC, transit should either be private or almost entirely rider-funded? Seriously, they should really take a cue from cities like Tokyo and Osaka/Kobe/Kyoto that do this incredibly successfully without driving out their most productive citizens.

There's a good op-ed about this here:
http://www.nypost.com/seven/03062008/postopinion/opedcolumnists/soak_the_rich__hurt_new_york_100714.htm

If the Assembly measure passes, many of the city's highest earners and biggest taxpayers -- who all enjoy global mobility -- are likely to pack up and leave. It's a great economic development strategy -- for New Jersey, Connecticut, Florida and London.

Not to mention other forms of tax avoidance that this will encourage...

[quobobo]

That many people make over a million?

The only reason I say this is a good idea eventhough many of them don't use transit, is because they have to pay for the pollution they are causing.

People making that much money can sometimes tend to be snobby, and eventhough they can use transit, they don't. So make them pay for the pollution, traffic, and negative effects their lifestyle has on society.

There was a time when rich took transit.

Please. $5 billion divided by 75,000 is about $66000 or $13000 a year - you're saying that we should charge people who might drive a car $13000 extra every year?

Carbon taxes levied on gasoline would bring in more money, reduce gasoline use much further, only affect people who do drive, and they're even the economist's best friend (look up the Pigou Club).

[miketoronto]

Maybe you should look at this from another angle. Do people need to be making $34 million? That is a huge inbalance. So one could say these people should be paying more taxes.
Some could say that no one needs to make that much money. So its their duty to pay back to society for their excessive lifestyle which damages the earth to a great degree. And they probably made their millions off the poor people who rely on those buses.
$13,000 is pennies for these people.

Again this could be some people's view. I am not saying it is mine. So don't yell at me :)

I do personally think though that there is a huge imbalance, and that $34 million for example is way to much money for one person to make, while we have starving people.

[quobobo]

Maybe you should look at this from another angle. Do people need to be making $34 million? That is a huge inbalance. So one could say these people should be paying more taxes.
Some could say that no one needs to make that much money. So its their duty to pay back to society for their excessive lifestyle which damages the earth to a great degree. And they probably made their millions off the poor people who rely on those buses.
$13,000 is pennies for these people.

Again this could be some people's view. I am not saying it is mine. So don't yell at me :)

I do personally think though that there is a huge imbalance, and that $34 million for example is way to much money for one person to make, while we have starving people.

Sigh. This is unrelated to what we're talking about, but I'll bite:

$13000 is pennies - but only on top of an already huge tax bill.

Take a look at the percentage of tax dollars already paid by the rich. A quick Google says the top 1% of earners in America already pay 40% of federal income tax - and you're telling me these people don't pay enough, that they're greedy for not wanting to pay an extra $13,000? You're saying that despite paying the lion's share of federal and state budgets, they still have a "duty to pay back to society for their excessive lifestyle"?

Not to mention that these people are very mobile - if you tax them enough there's not much stopping them from moving to London or somewhere else with less restrictive taxes. Last I checked, extremely productive citizens who already foot most of the budget are good people to keep around.

Back to the real subject: if we're talking about ways to fund transit and discourage actions that are bad for the environment, this is probably the silliest way possible to do it. If you really want to discourage driving and increase public revenue, it would make sense to A) target only people who drive and B) target more than a tiny (75000 out of 8 million or so citywide) fraction of the population. Millionaires aren't going to drive less if you hit them with a tax that applies whether they drive or not - and even if they did, they're a tiny fraction of the population anyway.

[Justin10000]

Please. $5 billion divided by 75,000 is about $66000 or $13000 a year - you're saying that we should charge people who might drive a car $13000 extra every year?

Carbon taxes levied on gasoline would bring in more money, reduce gasoline use much further, only affect people who do drive, and they're even the economist's best friend (look up the Pigou Club).

$13,000 a year extra?

And this is a huge amount for a millionaire?

Wow.

Greed does breed fools..

[Crawford]

The millionaires tax is no longer being considered. There is already an additional "temporary" surcharge on high income brackets for other needs.

They are now looking at some real estate exchange taxes and other transactional fees.

[jamesinclair]

The richest are already taxed the most.

The whole point of a percentage tax system is that everybody gets taxed equally. And yet the richest get taxed at a higher percentage.

Let us continue to reduce incentives to make business and get rich, afterall, the US doesn't need business and entrepreneurship.

[miketoronto]

Whatever :)
The rich should be taxed more. I am sorry, but if you are making $30 million a year, do not tell me you can't give up a large chunk of that to taxes.

You can live the high life on a $100 grand a year. You do not need millions.

So they should be taxed. There are many entrepreneures and business who do not worry about making $30 million a year. And if anyone did move because they were pulling in that kind of money and were being taxed higher, then I would just call that being greedy.

Money is not the be all and end all of life. And at the end of the day, is not what makes you happy. These people should be thankfull for they have, and if they have to pay higher taxes, they should be happy to do it knowing it is bettering the places they live in and society as a whole.

If I was making that kind of money, I would write checks personally myself to the transit authorities.

[GoflamesGo]

[QUOTE=jamesinclair;3473170]The richest are already taxed the most.

The whole point of a percentage tax system is that everybody gets taxed equally. And yet the richest get taxed at a higher percentage.
QUOTE]

I agree with you so much, I think the percentage tax system is a great idea. if you make more, you will probably spend more, and in return contribute more.

Miketoronto: I don't think that it's smart to "punish" the rich for being creative, and beign great at what they do. You don't just become rich ( very rich $1000000+) by being mediocre, you become rich by being great at something. Weather it be an athlete, or a plastic surgeon, or an incredible Ad executive. Either way, just because these people are earning millions, doesn't mean they dont deserve it.

quobobo: I agree, a city so business oriented should privetize their transit, but imagine how many people will complain about someone getting rich off of the "pennies" of people doing "good for the environment". aha Im sure they will come up with some reason to try and reduce th efortune someone would make. some bullshit like this "lower our fares, lower your profit"

[quobobo]

So they should be taxed. There are many entrepreneures and business who do not worry about making $30 million a year. And if anyone did move because they were pulling in that kind of money and were being taxed higher, then I would just call that being greedy.

I don't think this quote has ever been more applicable...

"Need" now means wanting someone else's money. "Greed" means wanting to keep your own. "Compassion" is when a politician arranges the transfer.


Hypothetical situation here: You could live in city A where you'll be taxed 60% of your income, or you could live in city B where you'll be taxed 30% of your income. Assuming amenities are similar in both cities, any sane person (or company) would choose city B - and you're saying that's greedy?

Also, we're trying to have a discussion based in reality, not idealism. When the costs of being located in New York start to outweigh the benefits, people and companies will relocate - it doesn't matter whether you think they're just being greedy, this is a serious economic problem.

quobobo: I agree, a city so business oriented should privetize their transit, but imagine how many people will complain about someone getting rich off of the "pennies" of people doing "good for the environment". aha Im sure they will come up with some reason to try and reduce th efortune someone would make. some bullshit like this "lower our fares, lower your profit"

Yeah, I agree - the mentality behind transit is so weird in North America. Private systems (or public systems that are minimally subsidized, allowing private competition) work incredibly well in many parts of Asia, but any mention of profit and transit together drives people here up the wall...

[VivaLFuego]

I don't see the connection between taxing the income of the rich and paying for transit. It seems pretty arbitrary.

Obviously, some reasonable taxes/fees here and there to support transit operations, particularly to cover the external benefits that transit usage provides. But in a city with a renowned cost-of-living and high wages, fare increases should be strongly considered. By factoring in the overall cost of goods and services, NY transit should probably have the highest fare in the country, all else equal.

[SouthSky]

Whatever :)
The rich should be taxed more. I am sorry, but if you are making $30 million a year, do not tell me you can't give up a large chunk of that to taxes.

You can live the high life on a $100 grand a year. You do not need millions.

First of all, the rich are already taxed more than others with the progressive percentage tax. I understand that you can live off 100k/year very easily, but why not strive for money? The more money one has, the more comfortable you can be.

So they should be taxed. There are many entrepreneures and business who do not worry about making $30 million a year. And if anyone did move because they were pulling in that kind of money and were being taxed higher, then I would just call that being greedy.

Money is not the be all and end all of life. And at the end of the day, is not what makes you happy. These people should be thankfull for they have, and if they have to pay higher taxes, they should be happy to do it knowing it is bettering the places they live in and society as a whole.

While your opinion might be one thing, some people might have a more extravagant personality. You cannot just use your opinion as the basis to tax the richer because they make and spend more money.

If I was making that kind of money, I would write checks personally myself to the transit authorities.

The people who USE the transit should have to pay for it, just as the rich are taxed for using the roads and skies. You cannot make someone pay for the rest of the population regardless of how much money they make. You cannot rely on the rich to solve the problems for the less rich as it is not their responsibility to shoulder the higher tax liabilities ad nauseum.

[travelinmiles]

I think this is a great idea, but other funding mechanism must be considered in addition to this.

[ThisSideofSteinway]

I think this is a great idea, but other funding mechanism must be considered in addition to this.

It doesn't matter as all the people in a position to make it happen have killed it. It's probably for the best as it means that a more sensible way (http://secondavenuesagas.com/2008/04/10/a-parking-approach-to-mta-funding/) of funding this can be found.

SouthSky - It's fair to say that transit riders could stand to be asked for a little more, as the average rider pays around $1.30 with an unlimited MetroCard. It's not quite as simple to say that the rich pay for their roads through taxes, however. For example, when Robert Moses was in the high-point of his expressway and bridge building-bonanza, he would start a project using capital garnered from the toll revenues of his Triborough Bridge and Tunnel Authority and then come to the city government and demand aid to finish all these projects (or otherwise be stuck with stubs of expressways and bridges). Being that Robert Moses wielded considerable sway in this period, the city almost never turned him down and chipped in hundreds of millions of dollars to finish all these projects - money that otherwise might have gone into transit.

Consider also the fact that GM among others were complicit in the dismantling of a vast majority of the trolley systems in the United States while lobbying to have more highways built (which is not to say that they only benefit rich people obviously, but it's safe to say that highways are more tilted in their favor in general).

There are many reasons why it's perfectly fair to ask car commuters and others from outside the city to contribute to the upkeep of inner-city transit (although on the other hand, I do agree that a "Millionaire's Tax" is not the best way to go about it)

[jtk1519]

This is seriously the dumbest idea ever.

[alexjon]

What do all those transit riders do for the rich? Nothing.

What benefit does a toy train do for the rich, when they can just have the driver or private air transportation take them where they need to go? Nothing.

Poor people need to stop bothering the successful of the world.

[quobobo]

What do all those transit riders do for the rich? Nothing.

What benefit does a toy train do for the rich, when they can just have the driver or private air transportation take them where they need to go? Nothing.

Poor people need to stop bothering the successful of the world.

That's a nice way to sum this up in a few pithy words while ignoring the economic repercussions and the amount the rich already contribute to taxes - not to mention much better alternatives to funding transit.

[alexjon]

That's a nice way to sum this up in a few pithy words while ignoring the economic repercussions and the amount the rich already contribute to taxes - not to mention much better alternatives to funding transit.

It was all hyperbole.

I don't think encouraging plutocracy is the way to go about doing things, and I disagree with a lot of your points-- however I disagree with drawing your money from a group of people that feels no direct connection (generally) to what they're funding.

Basically, forced charity can turn into abuse fairly quickly, and when you abuse the rich and powerful, they can abuse their riches and power. In short, if they get screwed by the subway, they have the resources to screw the subway right back.