The Tax Cut Fight

The speaker of the New York City Council, Gifford Miller, rang us up on the phone yesterday to call attention to his proposal for a $297 million tax cut. That puts the Democratic City Council speaker in the position of calling for a larger tax cut than the Republican mayor, Michael Bloomberg, who, as Mr. Miller pointed out to us with what seemed to be at least a slight amount of glee, wants to cut a mere $250 million a year in taxes. "I've been to the right of Mayor Bloomberg for a year and a half," Mr. Miller told us, reminding us that Mr. Bloomberg originally wanted to raise property taxes 25%, but that the Democrat-dominated City Council ended up limiting the increase to 18.5%.

We put a call in to an aide to Mr. Bloomberg, William Cunningham, for the mayor's response. Mr. Cunningham argued that $11 million of the Miller tax cut relied on federal welfare funds that weren't actually available, and that another $50 million depended on approval from the state Legislature, which wasn't likely to be forthcoming. What's left, Mr. Cunningham said, is $236 million — a smaller tax cut than Mr. Bloomberg's. What's more, Mr. Cunningham argues, the mayor's plan would rebate $400 to homeowners, while Mr. Miller's plan would leave the average homeowner with a $53 tax cut. Mr. Miller counters that his 2% property tax cut would include property-owning businesses and commercial landlords, which are left out of the mayor's tax-cut plan. Mr. Cunningham counters that Mr. Miller would end up giving multimillion dollar tax cuts to big property owners like Donald Trump and Con Edison.

The taxes we'd most like to see cut here at The New York Sun are the ones on the incomes of New Yorkers making more than $150,000 a year. Those New Yorkers are the most overtaxed, and they create the most economic growth. Of the two property tax reductions, Mr. Bloomberg's plan is better for homeowners, while Mr. Miller's plan is better for businesses. If the property tax must be cut before the income tax, some combination of the best of both plans — say, a 10% property tax cut for all property owners, treating businesses and homeowners equally — is probably in the best direction for the city to head.

For now, though, what needs to be said is, congratulations. It's a terrifically healthy dynamic for politicians of both parties in New York to be competing over who can cut taxes the most. If Messrs. Miller and Bloomberg continue on this path, maybe by the time they leave office, New York will no longer be the city whose residents have the largest combined state and local tax burden in the nation.