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The myth of the fleeing millionaires


As the AIG fiasco continues to fuel conversations about greed, wealth, and the intersection of public good and private business, this NYT piece today is worth noting, on the push from some New York state lawmakers to address the economic crisis in part by raising taxes on the wealthy:

It is perhaps the most potent argument offered by those who oppose increasing the income tax on wealthy New Yorkers: If you raise it, they will flee.

That case has been made repeatedly by Gov. David A. Paterson, who says that higher taxes should be a last resort. It has been featured in a campaign by Taxpayers for an Affordable New York, a coalition of real estate and business interests. And it has been on the mind of Mayor Michael R. Bloomberg , New York City's richest person, who said in a radio interview, "You can't tax too much those that can move."

Yet there is surprisingly little evidence to support the proposition that rich New Yorkers would bolt if forced to pay higher income taxes. Though tracking the movement of wealthy taxpayers from state to state is difficult, experts on public finance and migration say they have yet to document a substantial "rich drain" in states that have raised income taxes in recent years.

"Surprisingly little evidence"? I, for one, am not surprised. I've thought this argument was bull from the start. In fact, I find it a surprisingly weird, warped perception on the part of some of our state and city leaders of why people like to live in New York and New York City. It ain't because it's cheap.

In fact, it's already cheaper to live just about anywhere else in the country, if not the world. You want cheap, you move to Buffalo and get the house you've always wanted. You want one of the most extensive mass transit systems in the world (so you never have to own a car); the greatest and densest concentration of art, music, film, museums, and great and exotic food in the world; the inspiring architecture (some of it); the truly impressive public park system; a cab whenever you want one (though admittedly never when you need one); 311; the brooklyn bridge, the statue of liberty; the diversity, the energy, the crush of humanity outside your door...you want all that? Yeah, you gotta pay for it.

New York Republican leaders have complained that any tax increase would force New Yorkers to pay the highest income tax rates in the country. That may be true (though there are many many poor New Yorkers who pay no income tax at all), and my reply is, "Why wouldn't we?" I live in the greatest city in the world - I would expect each of us to pay for it according to our means.

Of course I want to have as much of my money as possible - but then again, it's not all really my money. I earn money at work, but in order to get to work, I utilize mass transit. Or sometimes I ride my bike, which is made much easier by roads that are kept up and bike lanes that allow me passage. If my bike gets stolen, I have recourse to our city's police force and court system. If I get run down on my bike, there are many publicly-funded hospitals nearby that will treat me. And though I'm fortunate to have employer-provided health insurance, I would gladly instead pay more in taxes to be covered by national health insurance of some kind. The city housing department recently inspected my building and got my landlord to make it safer, and my neighborhood is kept vibrant and diverse by lots of subsidized housing, and dotted with small city-supported community gardens that make the area greener and more social. Meanwhile, the Brooklyn Bridge doesn't fall down, the tap water and restaurant food don't kill me, my neighborhood is safe, and this summer I look forward to public art projects and music and cultural events filling the city's innumerable parks. I suppose I could pay for each of those things individually somehow, but it seems easier to have it taken out of my paycheck every couple weeks, doesn't it?

Of course, I'm nowhere near the tax brackets that would be seeing these proposed tax increases. But like any American, I harbor dreams of being there someday. And if I do get there, it will be partly because of the employment and advancement opportunities available to me in New York, and I will gladly plow some more of my money back into the city I love.

I agree with Joe Biden - if you love your city, your state, your country, then love the public services they provide and which rely on your support via taxes. Absolutely fight for your money to be better spent, via the ballot box and via activism. But all I can say is, if you make hundreds of thousands or millions of dollars, but New York City isn't worth a little more tax money to you...you don't deserve this city.

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Ah my young idealist...there is an old saying "those who are not a socialist at 20 have no heart, and those who are not conservatives at 50 have no brain"

As I am closer to 50 than to 20, and as we have done well as a couple, I can assure you that many HAVE left and many more, like ourselves are leaving. This last push was the final straw for us.

There are plenty of cities more beautiful, with a wonderful diverssity of food and experiences, in states which charge no to little income tax. I hvae already donated plenty to this city over the years, I do not see why we should stick around to be taxed at 60% in a few years, between the hikes in federal, state and no doubt city taxes as well.

Dream on my sweet child, and try and figure out a way to put a fence around the city to keep the entrepreneurs, self-employed and wealthy retirees from leaving...better yet, good luck figuring out a way to lure them back after they've established profitable centers elsewhere.

My father was right...each generation must learn these things the hard way.

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