New York is in an economic death spiral as companies and taxpayers flee, taking their money with them.
Bruce Blakeman needs to go bold.
So far, the Republican challenger in this November’s race for governor has been running a run-of-the-mill campaign, trading barbs with Gov. Kathy Hochul but advancing few big ideas.
Come on, Bruce. Offer New Yorkers real change: Roll out a concrete plan to phase out the state’s personal income tax.
It’s the economy killer.
The Albany spendaholics — in both parties — will claim it can’t be done.
But 68% of New Yorkers, regardless of their party affiliation, support zeroing out the income tax, a Morning Consult poll found.
That includes 65% of Democrats, with only 20% strongly or somewhat opposed to axing the tax.
All governments need tax revenue, but taxing income is far more damaging to the economy than taxing property or sales.
State income taxes cause businesses to flee to lower-tax or zero-tax states, eroding the tax base and causing brain drain.
In January, the White House Council of Economic Advisors urged all states with income taxes to end them, “though some combination of belt-tightening and finding less damaging forms of tax collection.”
The CEA’s analysis of New York state found that terminating the tax would bring a host of benefits, on top of letting residents keep more of their paychecks.
The average New York wage earner would make more pre-tax — as much as an average $6,757 more yearly — and business start-ups would increase by as much as 29%.
Naysayers will note that the personal income tax provides 30% of the state’s massive $277 billion budget.
They’ll ask how we can possibly fill that huge hole.
The answer is there will be no hole, if Albany adopts the strategy that several other states are currently using to eliminate their income taxes.
Here’s how it works: As soon as a state announces it will get rid of its income tax, business activity picks up.
Companies plan ahead, betting the change will improve their profitability.
As business booms, so does overall state revenue from taxes of all kinds.
The legislation puts a hard ceiling on future state spending, setting it so as not to increase beyond current levels — that’s the “belt-tightening” the CEA recommends.
Oklahoma’s law, for example, requires it to cut the income-tax rate every year overall state revenue increases by 5%.
That means legislators have no discretion to create new government programs to spend the added bounty.
And in New York, with its declining population, it’s eminently reasonable to freeze spending at current levels.
This is a gradual, fiscally responsible way to turn New York from tax hell to tax haven, making it the economic engine of the Northeast.
Smart states are already going to zero.
South Carolina Gov. Henry McMaster signed a law in April that will take the state’s current progressive income tax, with a top rate of 6%, down to zero over time.
The CEA offered another option, too, calculating that states can eliminate the income tax even faster by adopting a broad-based sales tax on goods and services.
In New York that would mean raising the current 4% state sales tax on goods to 8.25%, exempting groceries and rent to spare the poor.
The math works fine, but these CEA economists aren’t running for office.
Blakeman is hardly likely to propose hiking any taxes. Nor should he.
But he can make himself the Ron DeSantis of the Northeast by offering a vision of New York as a zero-income tax, high-growth state — Florida without the palm trees.
Blakeman has already proposed tinkering with the state income tax, by exempting the first $50,000 earned by single filers and $100,000 by joint filers, and making an across-the-board 10% tax cut on all income under $250,000.
Those are baby steps: No company is going to relocate to New York for that.
The interstate competition for business has never been keener.
A staggering 53% of corporate CEOs say they are “open to examining new locations” based on taxes and other factors.
The companies evacuating New York are leaving for states with no income tax, or to states with a plan to phase it out.
Those states are cleaning Kathy Hochul’s clock.
But New York is not doomed to economic failure.
With a gutsy plan like this, Blakeman can win over Democratic and independent voters, improve his odds of victory and turn New York around.
Go big, Bruce.
Betsy McCaughey is a former lieutenant governor of New York.
The post Go bold, Bruce Blakeman — with a tax plan even Democrats can love appeared first on New York Post.
