A group of New York millionaires are asking Governor Andrew Cuomo to take their money to help fill the state’s budget gap.
On Monday, a coalition of 35 millionaire New Yorkers, including former BlackRock boss Morris Pearl and filmmaker Abigail Disney, signed an open letter to the state legislature requesting a hike in their tax contributions.
The reason, they explained in their open letter — which was in the works even before the coronavirus — is to help meet the “urgent” budget needs the state is currently facing.
“If we want our state to continue being a national leader, we need to continue investing in our people and our communities, and that requires higher taxes for wealthy New Yorkers,” said Pearl.
“There’s no reason that millionaire investors who have profited the most from our state’s success should have lower tax rates than regular New Yorkers who have to work for a living.”
Among the taxes they’d like to see implements is the proposed “pied-à-terre tax” on second and additional homes over $5 million, which is having a second go in Albany after being previously shot down.
Other taxes the wealthy letter signers say they ought to be paying are what they’re calling a “strengthened millionaire’s tax,” with a new marginal rate of 9.62 percent on income over $1 million, and new income brackets starting at $5 million (10.32 percent marginal rate), $10 million (11.32 percent) and $100 million (11.82 percent). This tax, they said, would bring in roughly $4.5 billion per year. They’re also calling for a “modest” annual tax on net assets, applied to households with over $1 billion in assets.
Asked about the pied-à-terre tax bill sponsored by State Senator Brad Hoylman, which is being fought tooth and nail by the real estate industry, Pearl said in an email he didn’t think any losses in sales would be significant.
“I look at the Hoylman bill as having graduated tax brackets for the real estate tax,” said Pearl. “Just like the income tax has brackets (low wage people pay 10 percent, higher earners pay 20-something percent, etc.) the real estate tax can have brackets, too.
“Maybe people who live in regular homes should pay a lower percentage (not just a lower dollar amount) than people who live in very expensive homes. And it is also differentiating between people who live in their homes (primary residences) and people who own homes either as pied-à-terres or as investment property, etc.
“I suppose that the tax could, at the margin, be a tiny influence in people investing in the stock market rather than high-end real estate. But I doubt it will make any difference to the super-rich who are buying apartments to live in part time – I don’t think that taxes will make a big difference to them.
“And, honestly, I am thinking more about the gross inequality in New York, and the need for funding for schools to help our less fortunate neighbors fully participate in society, and not as much about the commissions of real estate brokers who sell multi-million dollar properties.”
Disney, whose great-uncle is Walt Disney, said she and others in her income tier wouldn’t even feel the extra taxes.
“If my taxes go up by a few thousand dollars, even tens of thousands, it won’t affect my standard of living in the least,” said Disney. “But if all of us in the top one percent are asked to pay our fair share, it means New York will be able to meet the needs of millions of New Yorkers who don’t have a little extra to give. I would be overjoyed to pay a higher tax rate to help our state provide resources and opportunities for all our citizens.”
Another signer to the letter was former AT&T Broadband CEO Leo Hindery, Jr. who agreed rich New Yorkers should be paying more.
Meanwhile, with the government focused mainly on stopping the spread of COVID-19, it’s unclear if the suggestions will get noticed, even while the state budget is being negotiated.
Mike Lapham, project director for the United for a Fair Economy’s Responsible Wealth coalition, which distributed the letter, said he understood legislators need to respond to the health crisis “first and foremost.”
But he noted that the virus will cause additional budget issues and that state leaders had previously asked wealthy New Yorkers to pay more in taxes during the 2009 budget crisis.
Working with the Fiscal Policy Institute and other millionaires he sent the letter, noting, “They know that the voice of wealthy people speaking out against their financial self-interest and saying ‘Tax Us’ is powerful in a very different way than organizations and individuals saying ‘tax the rich.’”
Lapham, who inherited his wealth, used to work as a housing specialist for the law firm of Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C. For the past 23 years he has been director of the Responsible Wealth project.
A spokesperson for Governor Andrew Cuomo suggested the governor’s plate was a little too full at the moment to focus on budget requests.
“We are dealing with a pandemic,” said Richard Azzopardi, a spokesperson for the governor. “Generally speaking, the Albany advocacy crowd needs to show responsibility and stop trying to shoehorn their pet causes, no matter how worthy they may be, into this very serious situation.”
Correction: An earlier version of this article stated working for Mintz, Levin was Lapham’s current job.