New York can’t afford not to tax the rich

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New York’s leaders owe their constituents honesty — about the challenges we face, the ways we got there and the ways out. Under the previous New York City mayor and state governor, we were denied that clarity. But our current leaders can provide it. 

We now know that former Mayor Eric Adams was intentionally under-budgeting and hiding costs to make the budget seem balanced. And former Gov. Andrew Cuomo was the master of ducking responsibility, constantly raiding New York City’s revenue to plug holes at the state level. All of that helps explain why Moody’s recently downgraded the city’s fiscal forecast.

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As we attempt to cover the cost of the mess left behind, the state has the most effective tools needed. Since the city provides far more in revenue than it gets back and operates as an economic engine for the entire state, stabilizing the city’s budget is very much a statewide issue. New York City could raise local taxes by 2% on New Yorkers making more than $1 million, filling the gap in the short term while funding programs for years to come.

My office just released a “Build-A-Budget” tool showing New Yorkers the depth of the budget deficit we’re in, and demonstrating that the best way to fill that gap without slashing services is to enact these common sense measures.

But like many city actions, we need state approval. And the main obstacle to taxing the rich is Gov. Kathy Hochul.

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As far back as 2014, Cuomo opposed a so-called millionaire’s tax. But since then, New York has lost tens of thousands of middle-class families, while gaining more millionaires — 13,000 in the past two years.

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The governor has been very clear in her pledge not to raise taxes on the ultra-wealthy. What’s less clear is why.

When I ran for lieutenant governor in 2018, it was on a platform of raising taxes on the wealthiest New Yorkers to fund services for the 99%. I was running against then-Lieutenant Governor Hochul, who didn’t support these measures then. It’s past time to reconsider.

The governor contends that if this modest increase were enacted, New York’s richest would leave in droves and deplete the tax base. The people actually leaving aren’t the richest residents, but middle-class Black and brown families. A 2023 report found that New York City’s Black population has declined by nearly 200,000 in the past two decades, or about 9%.

The same year, another report revealed multimillionaire and billionaire residents leave the state at a lower rate than all other income groups. There’s no reason to suggest a 2% increase on less than 1% of residents would dramatically shift that reality.

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I have no doubt that rich donors are threatening to leave — in the comfort of closed-door fund-raisers, confident their checks will buy them more time. But we’ve heard this around other revenue-raising measures, and those donors are still here.

The governor says she wants to help the city balance its budget, and if she can find the money elsewhere, or relieve unfunded mandates, that’s great news. To her credit, she’s shown willingness to invest in new programs such as universal child care. But raising revenue from the wealthiest residents remains the best sustainable way to deliver into future years, when larger deficits are projected.

The question isn’t whether New York can afford to ask its wealthiest to contribute a little more. The question is whether we can afford not to.

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Will we repeat the mistakes of New York’s most notorious failed executives, or help fix them?

Jumaane D. Williams is the New York City public advocate.