If You Want Something Done Right...

From Bloomberg News:

Cuomo Would Halve New York's Deficit With Tax Boost Planned For The Wealthy

So it appears that New York State may be about to do something that our federal government can't get done.  A new income tax proposed would affect those making more than $2 million a year while cutting taxes for those making less than $300,000 a year.

New York State faces a possible $3.5 billion deficit in 2013, partially due to state revenue lost from shrinking Wall Street bonuses (take that naysayers... Wall Street was indeed hit by the current economic meltdown it fabricated).  The new income tax would raise roughly $1.5 billion to go toward that deficit, with an additional $400 million going toward youth jobs programs and flood recovery efforts.  From the article:

“As a matter of simple math, there is not an intelligent or productive way to close the current gap without generating revenue,” Cuomo said.

The first part of that quote is sort of the shocker to me because of how clearly it states the issue.  It's not a plea for morality, or a treatise on fairness, it just calls out the mathematical truth.   New York State is short of cash, let's find a place to get some from.  Simple as that.  No revenue neutral obfuscation, no shifts of deficit burdens from the rich onto the poor and middle classes.  Simply tax the very richest, put more money in the pockets of the middle class, and let's see what happens.

Basic economics demonstrates that people with less money spend higher percentages of what they have because they need it to get by.  The middle class will now get more to spend and they most likely will.  That means more money going into the New York State economy.  Will it be enough to help right things locally?  Who knows, but it won't hurt and it should be more effective than the alternative of cutting taxes for the wealthiest since they are more likely to hold onto that savings in some way.  Either way, we get the chance to see how it plays out.

One possibility sometimes argued is that higher taxes drive the rich out of that geographical location.  I guess now we'll get the chance to test that out.  I imagine the bulk of these richest New Yorkers live around New York City, so lets see if New Jersey and Connecticut suddenly see an influx of millionaires.    I don't think it will happen, but I guess we'll have to see, and now we get that chance.

Obviously the heart of our federal system of government intended for states to have a strong presence in governing, but I don't think our national system was ever intended to be as impotent as it currently is.  So it's always good to see states taking the initiative.

Obviously California is known for having its own set of environmental guidelines.  Massachusetts, under Mitt Romney, put a health care mandate in place requiring everyone to carry health insurance.  Texas, under Rick Perry, put together measures to help young girls get the HPV vaccine.  Vermont has a single payer health care system in place.  Now New York State is going to tax the richest elite a little bit more to help deal with its current economic situation.

While these ideas may all seem like a classic liberal agenda, I would argue that they all rooted in common sense that many people, not just typical liberals, could get behind.  Going back to all that market forces talk of taxes pushing millionaires to move, I'm curious to see if certain states that take the initiative to implement common sense ideas currently flummoxing Congress see any population movement.  Will people leave Mississippi, one of the unhealthiest and poorest states in the country, to go to Massachusetts?  Will businesses move to Vermont, incentivized by not having to deal with as much health care red tape?

I used to hear people joke/threaten to move to Canada if things kept tanking in the USA.  Congress might achieve such a high level of uselessness that states themselves will have to find ways to actually listen to the people and get things done.  Maybe if enough of that occurs, I won't need to move to Canada to find a government that listens, I'll just need to move to Vermont, or Massachusetts, or New York, or whatever state handles things in a way I feel makes sense.

Sure that might crystalize a state's redness or blueness, but it will also help minimize the impact of that because Congressional self-crotch-punching will also be less impacting.