Sunday, March 29, 2009

Creative Destructive destruction

When the following two stories intersect it will be interesting to size up the carnage.


Personal income taxes for the upper middle class and the rich are about to skyrocket under a secret, soak-the-wealthy tax deal reached last night by Gov. Paterson and leaders of the Legislature, sources told The Post.

The two-tier tax plan would bring in $4 billion annually, in part by hiking income taxes a stunning 31 percent for all New Yorkers making more than $500,000 a year, the sources said.

A second, slightly lower tier would increase incomes taxes by 14.5 percent for singles earning $250,000 to $500,000 annually and for married and joint filers earning $300,000 to $500,000.

But late last week Mayor Bloomberg was channelling these columns when he said that raising taxes on high earners could drive them from the city. "One percent of the households that file in this city pay something like 50% of the taxes," explained the Mayor. "In the city, that's something like 40,000 people. If a handful left, any raise would make it revenue neutral. The question is what's fair. If 1% are paying 50% of the taxes, you want to make it even more?"
When a handful of producers are responsible for the majority of cash siphoned off by the non-productive, it only takes a few bailing elsewhere for the destructive folly of hyper-taxation to come crashing down.

It appears the thought of cutting spending is off the table (in case you were wondering):

On March 24, Paterson said he may have to drop 8,900 jobs from a state payroll estimated at 199,400, after unions rejected his proposal to eliminate a previously negotiated 3 percent pay increase. The budget presented by Paterson in December totaled $120.1 billion, including federal assistance and capital spending.

Labor unions and advocates for education spending have urged lawmakers to increasing income taxes as a way to avoid cutting jobs or state aid to local schools.
No doubt coming to a town near you soon.

No comments: