Cynthia Nixon Has No Idea How Much New York's Millionaires Pay in Taxes. She Wants Them To Foot the Bill For Her Progressive Agenda Anyway.
Progressive policies require higher rates and a broader base.
Cynthia Nixon wants millionaires to pay their fair share of taxes. Also, Cynthia Nixon does not know how much millionaires pay in taxes already.
On Wednesday, the former Sex and the City actress and New York gubernatorial candidate sat down with the New York Daily News editorial board to discuss the finer points of her sweeping, progressive policy agenda, which includes spending billions more on education, transit, and healthcare.
To pay for all these policies, Nixon is looking at soaking the rich. Her #fixthesubway plan would rely in part on a millionaire's tax. The Medicare-for-all bill Nixon's endorsed would require high income earners and their employers to spend thousands more on healthcare than they currently do. And her $7.4 billion education plan? Fat cats will be on the hook for that one, too.
"That sounds expensive," Nixon said of her education plan to the Wall Street Journal. "You know what? It is, and it should be. We can do it by requiring that millionaires, and billionaires and corporations, who this economy has blessed, pay their fair share for all of our children."
Yet when the Daily News Ed. Board asked Nixon some basic questions about the burden already shouldered by New York's high-income earners, the candidate was reportedly flummoxed.
"Though she has made imposing a millionaire's tax to help fund education and the subways a central theme to her campaign, Nixon, who is a first-time candidate with no state government experience, did not know the top income tax rate in New York, which is 8.82%. She also couldn't say how much of the income taxes raised for the state budget comes from millionaires—it's 40%—or offer a ballpark figure.
She said she worries there could be a breaking point where the wealthy decide to leave the state, but doesn't believe New York has hit that situation yet. She also said that by offering corporations and the wealthy tax breaks, it's starving the state of needed revenue to improve schools and infrastructure, all things businesses look for when deciding where to locate."
For someone who has made squeezing more money out of high income earners the lynchpin of her progressive campaign, this is a shocking and telling display of ignorance. It reveals an unfounded belief—not uncommon among many on the progressive left—that all that is needed to erect a Nordic-style social welfare system is higher and more progressive income taxes.
Yet, the fact is paying for expansive healthcare and educational benefits for everyone requires taxing everyone, not just a small but wealthy slice of corporations and high-income earners. Indeed, countries like the Denmark and Sweden manage to pay for their welfare states only through higher rates of taxation applied to a very broad base of people.
According to a 2015 Tax Foundation study, Denmark's top marginal income tax bracket of 60 percent kicks in for income earners making over 120 percent of national median income (which would be about $70,000 here in the United States), and the country charges a 25 percent value added (sales) tax. In the U.S. one has to make about 700 percent of the national median income ($400,000) before they're subject to top marginal tax rates. The U.S. also has no value added tax, with the steepest sales taxes in the country barely cracking 10 percent.
Despite this, leading lights of the progressive left continue to talk about their plans for the welfare state's expansion as if it can be born on the backs of the wealthy alone.
Sen. Bernie Sanders (I–Vt.)—America's most prominent self-identified socialist—continues to call tax hikes on millionaires and billionaires "the fairest way…to guarantee health care as a right," and his plan for funding Medicare-for-all includes a whole section on "options to make the wealthy pay their fair share."
Yet when one totals up the money Sanders expects to raise from those options, it amounts to $4.5 trillion over ten years. That's a princely sum that still pales in comparison to the $32.5 trillion costs of his Medicare-for-all legislation.
At best, this focus on taxing the rich by Nixon, Sanders, and co. to pay for their chosen policies demonstrates a naiveté about the costs of these programs. At worst, it's a craven attempt to win office using bait-and-switch plans that won't actually deliver what progressive candidates promise.