New York Governor Andrew Cuomo has stood firm against mounting pressure to avoid massive budget cuts by raising taxes on the many billionaires living in his state.
As that campaign to tax billionaires received a recent boost from Congresswoman Alexandria Ocasio-Cortez and the legislative leaders of the Democratic state of New York, Cuomo has insisted that he fears the tax initiative will incite the super wealthy to abandon the state. On Wednesday, he doubled, warning that if the state tried to balance its budget through billionaire tax increases, “it would have no billionaires left.”
But by defending billionaires, Cuomo is protecting a group from its most important financial drivers. More than a third of New York’s billionaires have funneled cash to the Cumo political machine, according to a Too Much Information review of campaign finance data and the Forbes list of billionaires.
New York disclosure records show that 43 of New York’s 118 billionaire families have donated money to Cuomo’s campaigns and the state committee of the Democratic party he controls. In total, those billionaires and their families have given more than $ 8 million to Cuomo’s political apparatus since his first campaign for governor. That includes large donations from billionaires in the past few weeks, as Cuomo has struggled to stop tax increases on billionaires.
Eleven of Cuomo’s billionaire donors have awarded $ 100,000 or more to his campaign and to the New York State Democratic Party cleanup fund. They include hedge fund titans James Simons ($ 3.6 million), Stanley Druckenmiller ($ 1 million) and Daniel Loeb ($ 114,000); Real estate tycoons Alexander Rovt ($ 321,000) and Stephen Ross ($ 80,000) and investor Ronald Perelman ($ 197,000). Ross, Simons, and Simons’ wife delivered a total of $ 115,000 to Cuomo this month.
With Cuomo blocking billionaire tax increases, its 43 billionaire donors have increased their net worth by $ 22 billion during the pandemic, according to Forbes data compiled by Americans for Tax Fairness, driving higher taxes on the wealthy.
In total, New York’s 118 billionaires have seen their net worth increase by $ 77 billion since the coronavirus hit the United States. Those multi-million dollar gains in just three months are more than five times the state’s projected total budget deficit size of $ 14 billion.
Cuomo’s office claimed that millions of dollars in campaign donations from billionaires did not influence the governor’s decision to oppose Democratic legislation to raise taxes on billionaires, calling the idea “stupid and insulting.”
“As the governor has routinely said, anyone who can be influenced by a dollar does not deserve to be in this business,” Cuomo spokesman Rich Azzopardi said. “New York currently has the most progressive and second highest millionaire tax in the nation, and we have been very clear about the challenges we face in an era where high incomes have already drifted away from the city and state. In the face of this pandemic, and the federal government is supporting legislation that would change the law and allow them to pay taxes from where they telecommute, not from the state or city where their business is located. “
New York Democratic lawmakers have put forward floating proposals to tackle the budget crisis with tax increases for the wealthy. One initiative would raise capital gains tax rates on those with more than $ 1 billion in assets, raising more than $ 5.5 billion in new public revenue from billionaires each year. New York City is home to more billionaires than any other metropolitan area on the planet.
Cuomo, however, has strongly opposed such tax increases to the wealthy throughout his political career. He previously championed a plan to eliminate New York’s bank tax and cut the state’s corporate tax rates to their lowest level in more than 50 years. He also cut tax rates on buyers of luxury yachts and private jets, and has now worked to hamper his party’s multi-million dollar tax plan.
Instead, Cuomo has lobbied for big spending cuts. In April, the legislature approved a plan to allow Cumo’s budget director to cut spending by $ 10 billion. That plan also approved Cuomo’s push to cut $ 2.5 billion from Medicaid, flat-line education expenses and impose stricter eligibility requirements on some long-term public benefits.
On Monday, the governor said that if his state does not get financial aid from Washington, New Yorkers may see an increase in public transportation rates and toll rates because “the money must come from somewhere.” Local governments could also see big cuts.
Earlier this month, Cuomo stated that he will block tax increases for billionaires in New York for fear that the wealthy will flee the state, a concern he reiterated on Wednesday. It is an argument he has been making for years to justify opposition to tax increases in his state’s financial elite, and there is little basis for it.
A 2016 study by Stanford University researchers on IRS data found that the so-called tax leakage among the wealthy is negligible.
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