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Forbes: De Blasio's New Tax Could Drive Wealthy From New York

Image: Forbes: De Blasio's New Tax Could Drive Wealthy From New York

By Dan Weil   |   Monday, 09 Dec 2013 07:09 PM

The tax increase proposed by incoming New York City Mayor Bill de Blasio on people with income over $500,000 could drive those taxpayers out of New York, says Steve Forbes, chairman of Forbes Media.

De Blasio wants to impose the tax to fund pre-kindergarten and after-school programs.

"It sends a signal out that New York City takes prosperity such as it is for granted," Forbes told Fox Business Network. 

Editor’s Note: Opinion: Retirees to Be Hit With Social Security Cuts

"New York does have unique advantages. It won't kill the city, but it sends a message out, we're not interested in entrepreneurs. More importantly we don't understand real wealth creation."

The city should be doing the exact opposite, Forbes says.

And taxpayers do vote with their feet, moving to places with lower taxes, Forbes says. That's especially true of people entering retirement. "They look at death taxes. They look at income taxes," he said. 

"The fact is a lot of people move to Florida, people move to Texas and some people even move to states like Wyoming, Nevada and the state of Washington." None of those states has a personal income tax.

New York City and state taxes together already constitute "one of the highest tax burdens in the country," Forbes said.

"It has devastated New York State. Look at upstate. To think New York City is impervious to this kind of demand, look what happened in the 1960s and '70s. They literally drove the city to bankruptcy. Why start on that path again?

Forbes says it's not surprising that the economy isn't helping the poor under President Barack Obama.

"When you have an economy that is stagnating, those who want to get ahead have the least chance to do it," he said.

"We should have learned that from the 1980s. You had more income disparity. People like Bill Gates and Steve Jobs were coming along doing very well. The economy blossomed, and people had a chance to move up."

The key issue is growth, Forbes says. "Instead of looking at a stagnant pie and figuring out how to cut more from it, how do you grow the pie?" he said.

"I wish people like Mr. de Blasio would realize that if you want prosperity, you get a lot more creating new businesses than by driving people away. [He doesn't] understand how prosperity is created."

Plenty of wealthy New Yorkers have expressed opposition to de Blasio's plan. "It shows lack of sensitivity to the city’s biggest revenue providers and job creators," Kathryn Wylde, president of the Partnership for New York City, a group of 200 CEOs told Bloomberg.

Editor’s Note: Opinion: Retirees to Be Hit With Social Security Cuts

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