50 economists urge New York to raise taxes on billionaires to address looming budget crisis

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A group of economists have written New York State governor to raise taxes on its billionaires to address a looming budget crisis.

In the letter obtained by Politico, fifty economists wrote the New York State Governor, Gov. Andrew Cuomo, arguing that a wealth tax could be the “saving grace” amid the covid-19 pandemic-induced budget deficit. New York currently has a $14.5 billion deficit which could increase in the following years if action is not taken, according to the report

“More than a million New Yorkers remain unemployed,” the letter said. “Billions of dollars in budget cuts to essential services and institutions are beginning. Thousands remain ineligible for state or federal unemployment assistance. In this moment of fiscal emergency, it would be a moral and economic failure for New York’s legislature and executive to leave this money on the table.”

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According to Fox business, a  proposal sponsored by New York State senator Jessica Ramos back in May, projects that if the unrealized capital gains of the state’s current 118 billionaires are taxed, it would generate about $5.5 billion in revenue, and the amount would go toward workers not eligible for unemployment benefits or federal relief measures.

The economists agree with Ramos’ proposal, stating that it would immediately generate $23.3 billion in funding for the state and would also provide an additional $1.2 billion in each subsequent year.

New York currently has one of the highest tax rates in the United States. Governor Cuomo previously argued that any further increase in tax would force the billionaires to move out of the state, which would end up counterproductive.

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But the economists claim that “billionaires much more frequently remain residents of the localities in which they became successful. Unless Wall Street is transported to Florida, then, such fears are unfounded.”

Governor Cuomo later acknowledged during a press conference that the state may need to raise taxes if there are no additional Federal aid.

Back in September, New Jersey lawmakers announced a 10.75% tax to annual income of more than $1 million. The rate was previously applied only to income above $5 million.