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Thoughts of the Week

By Jeffrey M. Weiner, Chairman & CEO, Marcum LLP

Thoughts of the Week
 

Enough of Robin Hood Politicians

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Enough of Robin Hood Politicians
 

For the third week in a row, politics takes center stage in my mind. This time it's the growing rift between New York's Governor Andrew Cuomo and New York City's new Mayor, Bill DeBlasio. The rift centers around one of the cornerstone promises of Mr. DeBlasio's campaign: instituting full-day pre-K education for every eligible child and funding it by increasing the New York City tax rate for those residents earning $500,000 ormore.

In his recent State of the State address, Governor Cuomo, facing a re-election race himself this coming November, announced he would create a state-wide pre-K program, would fund it out of the State budget and, in fact, would lower taxes in New York State. New York City would naturally benefit from these initiatives along with the rest of the State. How's that for stealing the Mayor's thunder?

A key point of information: both the Governor and Mayor are Democrats. One, in my opinion, is what I'll call a "Ronald Reagan Democrat"; the other seems to be way to the left of President Obama. You can figure out which is which.

Instead of being happy that the Governor was able to find the funding for something he's passionate about and made a campaign promise to do himself, at great effort and great cost to the people of New York City, the Mayor has only been critical of the Governor's plan. And instead of working together to make sure the children of New York get the best education possible, the Mayor seems intent on creating an unnecessary duplication of services for the City.

More importantly, the Mayor's campaign promise of universal pre-K for city children is tethered to his promise to increase taxes on the "rich." Of course, rich is a relative term in New York City. It's the tax part of the promise that is driving this entire ridiculous scenario. He needs the pre-K program to justify the tax, even though the State is willing to foot the bill. This is a clear case of the tail wagging the dog.

It seems Mayor DeBlasio is a member of what I'll call the new breed of "Robin Hood politicians" whose major focus is income equalization, actually taking from those who have and giving to those who don't. Rather than focusing on creating equal opportunity for all, these misguided elected officials are trying to take from those who made the most of their opportunities, in order to give to those who didn't.

But our new Mayor might not be fully briefed on the economics of NYC. Back in 2009, his predecessor, Mayor Michael Bloomberg, stated that 52% of NYS's tax revenue comes from those earning $500,000 or more. He went on to point out that in 2006, 5,000 people paid 30% of the taxes collected in NYC. If just 1,500 of those 5,000 decided to leave NYC for, say, Greenwich, CT, the loss of tax revenue to NYC would be $3,500,000,000. Yes, that's $3.5 BILLION. Not to mention the potential revenue loss in New York State taxes.

Mr. Mayor, making good on your promise to bring universal pre-K to NYC, though with Governor Cuomo's financial backing, is not a bad thing. Soaking the "rich" with new taxes, just because, is a bad thing. And if Mayor Bloomberg's numbers were right, the potential of losing just 1,500 fat cats should make you think twice. Then again, if your aspiration is to be a one-term Mayor, hopefully your successor can fix whatever damage you cause in a City that was in pretty good shape when you inherited it.



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Disclaimer

The opinions expressed in this column are solely those of Jeffrey M. Weiner and do not represent those of Marcum LLP, its partners or its employees.

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