If Bill de Blasio keeps going the way he’s going, the Sunshine State’s going to put up a statue of him. Not since Ponce de Leon discovered the place has any one man done more to guarantee future inflows of wealth and investment to Florida than our new mayor.
Here in Gotham, the mayor believes that by hiking taxes on the rich — i.e., the estimated 54,000 villainous city residents who have the audacity to earn more than $500,000 a year — he’ll accomplish two things.
First, he’ll gain the revenue he needs to fund his plans to offer all-day pre-kindergarten classes to every child in New York.
Second, he’ll have made a gesture toward his New York of the future, where the rich pay closer to what the mayor believes is their fair share.
Savvy Floridians understand that this is a gift to their state. Because the main consequences these days of taxing the rich is exporting the rich. And when New York’s rich go looking for sunnier shores (pun definitely intended), many land in Florida.
One big reason is that, on top of warm weather and sunny beaches, Florida has no income tax. That helps explain new Census numbers released last month which show Florida among America’s fastest-growing states.
With that population has come a huge inflow of wealth. According to IRS figures used by Travis Brown in “How Money Walks,” from 1992 to 2010, Florida saw a net inflow of $95.6 billion in wealth (as measured by adjusted growth income). The largest chunk, $18.9 billion, came from . . . guess where? New York.
Not that de Blasio has taken the lesson. To the contrary, he continues to reaffirm how important it is to him, on principle alone, that New York’s rich be taxed more.
In his inaugural address, the mayor explained his progressive math this way: In exchange for making the rich pay the equivalent of “a small soy latte” each day, he’ll have the means to “help our kids get on the right path and stay there.”
Leave for another day the question whether de Blasio’s pre-K program is all he claims. Today we’ll limit ourselves to the math.
In a ranking of states in terms of how they treat $500,000 earners, Forbes estimated a New Yorker with that income would pay roughly $37,000 a year in state and local income taxes.
Now think of how a clever mayor in Florida might use that to respond to de Blasio’s latte liberalism: “Move to my town, and save enough each year to buy a new car or pay your kid’s college tuition.”
Wait a minute. Turns the folks in Florida are already making that pitch. As an ad by one South Florida development association puts it, “With no state income tax, relocating to Greater Fort Lauderdale is like getting an instant raise.”
Which means that the long-term beneficiaries of de Blasio’s tax hike may not be the children of New York. They may be the children of Florida.
In contrast to Mayor de Blasio, Gov. Cuomo at least understands wealth is mobile. As he put it in his State of the State this week, “People move and businesses flee. So let’s continue to make our state more competitive, let’s cut more burdensome business taxes.”
Still, what neither our governor nor our mayor has recognized is this: These days Florida isn’t really competing with New York for investment. As Gov. Rick Scott told this reporter while visiting the Big Apple last summer, the governor he regards as his real competition is Rick Perry of Texas — who presides over another no-tax state.
The numbers appear to back him up: Those same IRS figures show New York has lost wealth to every one of the nine states that have zero income tax.
In other words, New York isn’t the competitor; it’s the booty. The real competition is among the low-tax, low-regulation states to cart off the wealth and industry that remains here, whether it’s the hedge-fund manager who could just as easily run his business from a base in Palm Beach, or the retiree who realizes he can trade in his winter parka for a bathing suit by moving to Naples — and save a few grand on taxes to boot.
Now it’s true the exodus of wealth from New York to Florida long preceded de Blasio. It is also true he may not even get his tax hike through, given the governor’s opposition.
Even so, the mayor can still be a great help to Florida. Because every time Bill de Blasio opens his mouth to advocate for higher taxes for New York, he’s makes Rick Scott’s sales pitch.