The jockeying in Albany over a new state budget seems to be growing more intense, as proposals have surfaced in the past few days for alternatives to Gov. Eliot Spitzer’s $124 billion spending plan. The most radical, as well as responsible, would be a five-year income tax surcharge on millionaires — proposed by the Assembly.
Not surprisingly, the idea was immediately dismissed by Senate Majority Leader Joseph L. Bruno, who like his party’s role model in Washington, seems to think that the best way to run government is to increase spending and cut taxes at the same time.
How else to explain Bruno’s pledge to the Healthcare Association of New York Wednesday to undermine $1 billion in health care cuts proposed by the governor?
Trying to have it both ways is the reason the federal deficit is at record levels, and why the state is faced with a $4.8 billion budget gap. You either have to raise taxes or cut spending to balance the equation, and it’s clear Bruno has little intention of doing either. (Instead, he wants to increase the size of the state’s property tax rebate program.)
What would be so bad about raising the income tax rate on people making more that $1 million, from 6.85 percent to 7.7 percent? The total added cost to these wealthy people would be just $8,500 per every $1 million of income. Does Bruno really think such a penalty would be so severe as to send these people packing?
Such a surcharge, however, would raise $1.5 billion a year for the state.
Another idea floating around Albany, one which Bruno didn’t summarily dismiss but which would probably be far more unpopular than an income tax hike, would be to double the state tax on cigarettes to $3 per pack. It would raise an estimated $500 million annually, encouraging 168,000 smokers to quit in the process, according to anti-smoking advocates. That, of course, would help cut state health care costs.
The tax would also disproportionately penalize the state’s lower-income smokers — at least those who don’t quit. But getting them to quit, and keeping others from getting started, is at least as much the objective as raising money — and thus probably a good idea.