Sen. Chuck Schumer has this thing about daggers. It’s his favorite metaphor, as in his warning that eliminating the federal deduction for state and local taxes would be “a dagger to the heart of the people of New York.” Or that giving workers flex-time instead of overtime would be a “dagger to the heart of the middle class.”
It turns out that the latest dagger comes from the senator himself, and is aimed at the back of Bill de Blasio. There’s talk that, at a fund-raising event Thursday at the Wythe Hotel in Brooklyn and elsewhere around town, Schumer has been warning that de Blasio is making a mistake with his plan to raise taxes on the wealthy here in the city. Schumer’s office wouldn’t confirm it.
Reporters have been gamely trying to get Schumer to say this for the record, starting from the moment last month when Schumer endorsed de Blasio. The senator “dodged,” as Newsday put it, a question about whether he supported de Blasio’s signature tax proposal.
That is a plan to jack up taxes on the segment of New Yorkers already paying the highest taxes, those making more than $500,000 a year. Asked about this, Schumer said it’s not his job to dictate city policies. Instead it looks like he’s going to make it his modus operandi to bad-mouth the next mayor’s tax strategy in private.
What Schumer has been stressing is that New York can’t live in isolation: It is in a competitive relationship with neighboring cities and states. Schumer makes it clear that he comprehends, even if de Blasio does not, that tax policies have consequences. If New York attacks wealthy people, they can leave — or move their businesses.
It would be wonderful were Schumer to stop there. But he’s no friend of the wealthy New Yorkers from whom he spends so much time seeking contributions; it’s not his aim to let them off without tax increases. His strategy would be to move the taxation that de Blasio wants to impose locally to the national level, through a more progressive tax system.
“The revenues side of the federal ledger is underperforming by historical standards,” Schumer declared in a National Press Club speech at the end of the last fiscal year, in which the federal leviathan raked in $2.435 trillion from taxpayers. Despite this, Schumer insisted, “we have a revenue problem.”
Schumer’s preferred approach is to target high earners for these allegedly necessary new revenues — on a vast scale: “You can gain about a trillion dollars from raising the top rate and having the estate tax go up,” he told Ezra Klein of The Washington Post.
Raising federal taxes has two advantages for the Schumerian Democrats. First, it would make it harder for New Yorkers to escape. If the taxing is done at the national level, it’s less easy for a New Yorker to escape it by moving his business to, say, Pennsylvania or the pro-growth paradise of Texas. Instead, New York taxpayers would be trapped by Schumer’s IRS.
Attacking New Yorkers’ income via the imposition of national taxes, moreover, would have another advantage, at least from Schumer’s point of view: It would expand the power of the federal government, whose interests Schumer represents in New York state.
Schumer is itching to be majority leader in the Senate. That’s not a position to which one is attracted because of the principles of limited government. It’s a position to which one is attracted if one wants to have a role in wielding federal power and inclines one toward maximizing federal revenues.
New York already sends the federal government far more money than it receives. Between 1990 and 2009, according to the calculations of the Economist magazine, the state’s taxpayers sent $956 billion more to Washington, DC, than New York received in federal spending — the largest gap of all 50 states.
The situation adds up to a potentially testy relationship between the man the polls say will be the next mayor and the man who hopes to accede to the leadership of the Senate. It suggests that if de Blasio wins the mayoralty, he will want to watch not only his wallet but his back.