Bloomberg and Redistribution

Tucked into Mayor Bloomberg's budget presentation yesterday were two bar graphs calculated to inspire outrage among New Yorkers. "New York City Pays $11.4 Billion More in Federal Taxes Than It Gets Back in Funding," was the headline on one of the graphs. "New York City Pays $2.6 Billion More in State Taxes Than it Gets Back in Funding," was the headline on the other.

It's nice to know that Mr. Bloomberg's blood is boiling about this and that he wants the matter rectified. But surely some of the imbalances in the relationships between the city and the state and the city and the federal government come not from any deliberate effort to give New York City a disequilibrious deal, but from the fact that America and New York State have "progressive" tax codes that tax the rich at higher rates than the poor. NewYork City is wealthier than Alabama or Utica, so taxpayers here end up subsidizing taxpayers there.

Mr. Bloomberg's complaint is a little surprising, too, because his approach to tax policy here in New York City so far in his administration has been to increase taxes on the rich. Mr. Bloomberg's neighbors in a two-block radius of his Upper East Side home no doubt pay millions more in taxes to the city than they get back in funding.

The imbalance is greater now than it was a few years ago, because Mr. Bloomberg, with the collaboration of the City Council and the Legislature in Albany, increased the income tax on the wealthiest New Yorkers. Were Mr. Bloomberg and his wealthy Upper East Side neighbors to show up at City Hall with charts showing they pay more in taxes than they get back in services, they'd probably be laughed back uptown.

If Mr. Bloomberg genuinely feels that a progressive tax structure is counterproductive or unfair, we welcome him to the fight for a flat tax and look forward to his effort to lower the income tax rates on New Yorkers with the highest incomes. We understand and appreciate that the mayor, in making this argument, is just doing his best to win a better deal for New York City from Albany and Washington. Still, the upstate Republicans in Albany and the Red State Republicans in Washington aren't so dumb that they can't detect such disingenuousness.

Mr. Bloomberg would have a stronger case if he weren't doing to New York City's rich exactly what he is complaining that Washington and Albany are doing to New York City.