The health-care bill would suck billions of dollars out of the city’s economy and projections of long-term savings should be taken with “a big grain of salt,” Mayor Bloomberg cautioned yesterday.
Despite those concerns, the mayor didn’t rail against the bill as he had in the past, largely because of changes pushed through by Sen. Charles Schumer to protect the city from severe cuts to Medicaid and the municipal hospital system.
Bloomberg “is certainly impressed with the improvements,” one City Hall source said. “He’s not suggesting anyone vote yes or no.”
Adopting a neutral stance as the bill enters the homestretch, the mayor indicated that his chief concern now was that a 3.8 percent Medicare payroll tax would be imposed on investment income for individuals making more than $200,000 a year and couples earning above $250,000 beginning in 2013.
The city’s Independent Budget Office estimated that 52,000 individuals and 81,000 couples would qualify if that tax kicked in this year.
Since residents here generate about $93 billion a year in unearned income, Bloomberg said that meant about $3.5 billion in “new taxes on New York City.”
“What is clear here is that there is an enormous, greater tax burden on people who have certain kinds of income,” said the mayor, referring to divi dends, capital gains and interest.
Another $1 billion or so would flow to Washington from a separate 0.9 percentage point increase in Medicare taxes, also on high-income taxpayers.
If all that money remained here to be spent “rather than sent to the government,” he added, it would generate twice as much in economic activity, or about $9 billion.
If approved by Congress, the top capital-gains tax would increase from 15 percent to the 20 percent proposed by President Obama and then to 23.8 percent in 2013.
Bloomberg noted that there was an upside to the bill, since lots of uninsured New Yorkers would get coverage. But he was skeptical about the $138 billion in savings projected by the Congressional Budget Office over the next decade.
“You’ve got to take all projections, even for six months — certainly for the next nine years — with a big grain of salt,” he said.
“If you’re a pessimist and you don’t like the bill, you say it’s not going to come. If you’re an optimist and you like the bill, you say, yes, those will be the savings.”