WASHINGTON — The inauguration of Democrat Bill deBlasio as Mayor of New York City puts the focus on the soaring income inequality throughout the country and certainly in Manhattan, home to Wall Street and the hedge fund industry, where million-dollar salaries are not uncommon.
The new mayor campaigned on a promise to close the wealth gap, which expanded during the three terms of outgoing Mayor Michael Bloomberg. Without faulting Bloomberg, who did a great deal of good for the city in making it prosperous and safe, DeBlasio ushers in a new era of concern for out-of-control wealth at the expense of both the poor and a shrinking middle class.
Sworn in by President Clinton on a frigid New Year’s Day in New York, DeBlasio said that economic and social inequalities “threaten to unravel the city we love.” One measure he proposes is a tax on high earners to fund full-day pre-school for every child. In a city where residents face federal, state and city taxes, the prospect of an additional tax, however worthy its purpose, will face opposition.
Calling it a “fair tax,” or a “surcharge” might make it more palatable. In any event, DeBlasio will need to convince the New York State legislature, and so far Gov. Andrew Cuomo has not committed to fighting the battle on the new mayor’s behalf.
Still, Democrats are excited to see one of their own championing progressive causes and tackling head-on the issue of raising taxes on those who can most afford to pay them. DeBlasio noted in his inaugural remarks that he would only raise taxes for those in the uppermost bracket, and that it wouldn’t pose much of a burden given their income. People making between $500,000 and $1 million would pay on average $973 more, which is less than $3 a day, “about the cost of a small soy latte at your local Starbucks,” he said.
Maybe in this new land of the mega-rich, candidates will be asked how much a soy latte costs instead of how much a gallon of milk or a loaf of bread costs.
We haven’t seen this level of income inequality since the days of the Robber Barons, early in the last century. The income tax, proposed by President Theodore Roosevelt and embraced by his successor, William Howard Taft, became legal with passage of the 16th Amendment in 1909. It was directed at this group of home grown oligarchs, and no one else. It was a tax on millionaires, and was not meant to be broad based.
The need to fund wars and pay for government services in an industrialized country ushered in the broader system of tax collection that we see today.
Somewhere along the way in that transformation, the rich now pay less than their fair share when balanced against the wealth they have gained.
Republicans will yell “class warfare,” because that’s what they always do. But given the lopsided statistics with top earners taking home most of the wealth in the country, Republicans might find it hard to oppose a “fair tax.” So let the revolution begin in New York, where all eyes will be on DeBlasio to see if he can convert his campaign rhetoric into governing accomplishments that will make the city stronger and restore some of the equilibrium that’s been lost in the mad dash for Wall Street’s dollars at Main Street’s expense.
The new mayor will no doubt encounter many of the same obstacles President Obama faced when converting campaign rhetoric into reality, but it’s time someone stood up and started tackling in a serious way what Obama calls “the defining issue of our time” before more damage is done to the values of hard work and equal opportunity that should be guiding our tax policy.
U.S. News Syndicate, Inc.