$350 million: New York’s budget shortfall estimate for the current fiscal year  $3.0 billion to $3.5 billion: New York’s projected budget gap for fiscal year 2013  $4.59 billion: Annual average revenue over the last three years from the so-called millionaire’s tax—which is set to expire December 31  Is that a sufficient explanation for why I don’t think Albany should let the millionaire’s tax, a surcharge on the state’s highest earners, expire? Some call it liberalism, others call it math.  Governor Andrew Cuomo opposes the extension of the millionaire’s tax, actually a tax on individuals who make at least $200,000 and families that make at least $300,000. He thinks it would place New York at a competitive disadvantage with its neighbors.  I respect the governor, but that’s a canard. As Robert Frank explained last February in The Wall Street Journal, the number of millionaires in New York actually increased in 2010 (when the tax was in place): “New York had 381,197 millionaires in 2010, an increase of 35,000 millionaires from 2009.”  In that same article, Mr. Frank quoted Kathryn Wylde, the president of the Partnership for New York City (which opposed the tax extension), as saying that even if the numbers don’t support the theory that rich people are flocking to other states, there is some anecdotal evidence that they are. “Our evidence is from conversations with lots of high earners and there is an increasing tendency to gravitate to lower-tax places,” she said.  If it’s anecdotal evidence the Partnership wants, here’s what Mayor Michael Bloomberg, also known as the richest man in New York City, said in 2008: “I can only tell you, among my friends, I’ve never heard one person say ‘I’m going to move out of the city because of taxes.’ Not one. Not in all the years I’ve lived here.” (Despite this astute observation, Mr. Bloomberg opposes the tax.)  Because Republicans in the state legislature and the Governor are deaf to this logic and fiercely oppose the millionaire’s tax extension, Sheldon Silver, speaker of the Assembly, has proposed a “true” millionaire’s tax—one on individuals with incomes in excess of $1 million, rather than those who probably have assets around that amount. He estimates that this more narrowly tailored surcharge would bring in $4.1 billion in the 2012 calendar year.  Mr. Cuomo may think it’s too late to flip-flop on the millionaire’s tax. Mr. Sheldon’s proposal, which targets only the colossally wealthy and spares the very wealthy, might help him save face.  Raising taxes is not the only way to close a shortfall. Everyone knows that. We could slash school and infrastructure budgets, or cut health care funding for the poor. Those are better options?
To close the New York budget shortfall, Albany could cut funding for health care and schools. Or it could just extend the surcharge on the state's highest earners.