Raising taxes on the city’s wealthiest residents will simply send them packing, Mayor Bloomberg warned yesterday as he denounced a plan to impose a higher income tax on those earning $1 million or more.
“If you were to raise taxes on a particular group of people, their alternative is moving out of the city and taking with them all of the revenues they generate, their businesses and everything else,” the billionaire mayor said.
Assembly Democrats have proposed a state surcharge of 0.85 percent on tax filers with incomes of $1 million or more for five years.
The city’s Independent Budget Office said that would hit 40,300 households within the state, of which 20,500 are in the five boroughs.
Of the $1.5 billion raised the first year, $784 million would come from city residents, according to the IBO.
Assemblyman Richard Brodsky (D-Westchester), who is pushing the surcharge, accused the mayor of being inconsistent by opposing the higher income tax while supporting toll hikes and congestion pricing.
“I guess the theory behind all these taxes on the middle class is they can’t afford to move to Jersey,” said Brodsky, the leading critic of the mayor’s plan to charge drivers $8 to enter Manhattan.
The tax-the-rich scheme appeared to be going nowhere under Gov. Spitzer, since both he and state Senate Majority Leader Joseph Bruno had flatly ruled it out.
Brodsky said he’s hopeful that David Paterson, who is being sworn in Monday to replace the disgraced Spitzer, would be more receptive.
“On economic issues, David is much more progressive than [New Jersey Gov. Jon] Corzine, Spitzer or Bloomberg,” Brodsky claimed. “He’s likely to have an open mind.”
In his first press conference yesterday as governor-designate, Paterson made no commitments when it came to holding the line on taxes.
Bloomberg has been warning for months that the anemic economy is going to force the city and state to make some hard budget choices down the road.
Yesterday, he argued that if the economy goes into a complete meltdown, the millionaire tax wouldn’t generate enough money to make it worthwhile.
A better idea “would probably be a tax that’s probably a lot more broad-based,” the mayor said.
Brodsky found an ally in Dan Cantor, executive director of the Working Families Party, who has proposed a bigger tax hike on those with incomes above $250,000.
“The mayor’s just wrong,” Cantor said. “We did this four years ago with the mayor leading the charge because he understood you can’t cut services.”
Bloomberg raised the income and sales tax temporarily to help the city turn the corner on the financial devastation wreaked by 9/11.
As promised, those taxes were eliminated after three years. An 18.5 percent property-tax hike was scaled back by 7 percent last year.