Op-Ed

Sanders Backs NYC ‘Millionaire Tax’ Despite $4 Billion Budget Surplus

REUTERS/Yuri Gripas

Christian Barnard Policy Analyst.
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Yesterday afternoon, Senator Bernie Sanders provided yet another example of his political myopia. Appearing at a Manhattan subway station, he endorsed New York City Mayor Bill de Blasio—who is currently running for reelection—specifically praising the incumbent mayor’s newly-proposed, statewide ‘millionaires’ tax.’ The policy would crank up state income tax rates for New Yorkers making more than $500,000 a year and generate $700 million in revenues to help repair the crumbling subway system (MTA), and to subsidize discount transit rides for 800,000 of NYC’s poorest residents.

Rehearsing his standard demand that the country’s wealthiest “need to start paying [their] fair share” in taxes, Sanders failed to acknowledge that the revenues required to begin significant MTA overhaul are already locally available. In fact, the city ended the fiscal year in July with a budget surplus of over $4 billion. It appears that Sanders single-mindedly favors any policy that appears to punish the rich, even at the expense of promoting responsible fiscal practices.

Sanders’s subway charade was just another rehashing of the only play in his playbook: raging against the rich. De Blasio couldn’t help but join in, complaining about the rigged financial system and its Wall Street beneficiaries. But he was just playing politics. The mayor has been known for his spats with NY Governor Andrew Cuomo over whether NYC infrastructure spending will be covered on the state or local level. His proposed ‘millionaires’ tax’ is an attempt to put pressure on Cuomo and state legislators and to redirect attention away from the fact that his office has only contributed one-third of what the state has to the massive infrastructure project.  And while Sanders claimed he wasn’t taking sides, his backing of de Blasio’s proposal was a clear effort to apply additional pressure on Albany.

The country’s most beloved politician also ignored the fact that his fellow progressive de Blasio, who already gave the MTA $2.5 billion just two years ago, was directly contradicting his own statements from earlier this year. According to an NY Daily News report, de Blasio took a much different stance back in July when he blasted MTA chair Joe Lhota, saying  Lhota was “nowhere near spending” that money. De Blasio also said he lacked faith in the transit agency’s efficiency and that he’s “not going to throw away good money after bad.” Only months later, de Blasio is singing a much different tune. What changed? Only that the MTA subsidies would now come directly from the pockets of the rich. Suddenly, with Sanders backing his reelection bid, he thinks it’s money well-spent.

One also can’t help but wonder how much is a “fair share” in Sanders’s eyes. New York State already has the highest income tax burden in the country, as well as one of the most progressive tax structures. In NYC, according to the most recent IBO report, the top 1 percent account for 46 percent of personal income tax revenues locally. Statewide, the top 7 percent of households—or all making over $200,000 in annual income—account for 62 percent of the total income tax liability. Meanwhile, the bottom half of the income distribution pays nothing in state or local income taxes.

But none of this is good enough for Sanders. He’s not only calling for an irresponsible and unnecessary tax hike, but he’s also diverting focus away from much-needed subway repairs. If Sanders really cared about the immediate needs of New York City’s working class, he’d spend less time virtue-signaling, less effort pressuring New York state legislators, and more time urging de Blasio to use his own massive local budget.


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