The golden goose can fly. For the first time ever, all three elements of a successful post-industrial urban economy \u2014 capital, high-income labor \u2026<\/b>
\nThe golden goose can fly. For the first time ever, all three elements of a successful post-industrial urban economy \u2014 capital, high-income labor and financial transactions \u2014 are almost instantly mobile. It\u2019s about the worst time ever to attempt to impose multiple untested new taxes on all three elements, but that\u2019s what New York\u2019s ascendant political class wants. The Invest in Our New York Act is a package of six bills hiking state taxes by $50 billion a year. Numbers out of context are meaningless. Why not raise taxes by $200 billion, or heck, $90 trillion? But in the context of the New York state budget, $50 billion is an \u00adunprecedented hike. Without the pandemic and lockdowns, the state likely would have taken in $90 billion in taxes this coming fiscal year, meaning the bill\u2019s proponents want to raise taxes by close to 60 percent. A sample of the new taxes: first, on high-income labor. A single filer with $1 million in income would see a 23 percent state tax hike, to 8.41 percent, up from 6.85. A filer making $10 million would see a 48 percent hike, to 12.14 percent, up from 8.82 percent. Second, on financial capital. A yearly \u201cbillionaire\u2019s tax\u201d \u00ad(requiring a constitutional amendment) would levy a new 15 percent annual tax on billionaires\u2019 growth in wealth for that year. That is, if one of New York\u2019s 120 billionaires see his assets grow from $1 billion to $1.25 billion that year, he\u2019d pay $40 million in \u00adextra tax that year. Finally, financial transactions. New York\u2019s neo-progressives want to revive the state\u2019s decades-dormant tax on stocks and levy it on bonds and derivatives, too. The arguments for these taxes read like earnest essays written by bright high-school students planning their optimal Busytown economy. \u201cThis is similar to the small sales tax consumers pay when buying candy bars at the \u00adsupermarket,\u201d goes the argument for the bond-transfer tax, for example. Wealthy New Yorkers and big white-collar employers supposedly will not in any way change their own behavior and protect their \u00adincome and assets by relocating themselves, their wealth and their employees out of state, because they never have before. Supporters can\u2019t see that rich earners might respond differently to a double-digit income-tax hike today than in the past, now that almost all white-collar work can be done from anywhere. Rather inconveniently for this argument, it isn\u2019t theoretical. The white-collar work is being done from anywhere and has been for a year now. Commuter-rail traffic stalled out at 20 to 25 percent of normal early last summer. As for financial transactions: The minute Britain left the European Union in January, billions of stock trades moved instantly to Amsterdam, Dublin and Paris. There was almost no cost to moving this activity. Wealth? \u201cNew York already has a wealth tax in New York: It\u2019s called the property tax,\u201d argue the Busytown essayists, in favor of levying the same annual tax on stock portfolios. Well, sure. I can\u2019t move my house from Manhattan to Florida. But I can certainly declare that I\u2019ve moved my stocks and bonds from Manhattan to Florida, along with myself. This is even easier to do, if the company that manages my \u00adfinancial assets has just opened a big office in Florida. These tax-hike ideas are fantastical, except they are real. Most of the new crop of AOC-style state legislators subscribes to them, which means any state lawmaker fearing a primary race is under pressure to sign up, too. Supposedly mainstream mayoral candidates like Scott Stringer are on board, and even the nominally pro-business Ray McGuire says the wealthy should pay more. The neo-progressives don\u2019t seem to realize they are making Bloomberg\u2019s 20-year-old \u201cluxury city\u201d argument: that the rich will pay a little bit more, because they have to be in Manhattan. This is a strange argument to make when Midtown Manhattan is so quiet that a dog wearing a loud bell can turn heads on his walk. Even if everything goes well, there is little prospect that office workers will return to Manhattan before Labor Day. There is no point in sitting in an office with a mask on. So financial CEOs and other various rich employers will have another long, hot summer during which to ponder Manhattan from afar. Nicole Gelinas is a contributing editor of City Journal.<\/p>\n