WEBVTT - Taxes Are Due Soon. Should the Rich Pay More? 0:00:02.680 --> 0:00:11.560 Bloomberg Audio Studios, podcasts, radio news, taxct ZAX. 0:00:12.160 --> 0:00:16.120 It's a call that's become increasingly popular from New York 0:00:16.200 --> 0:00:17.360 City to London. 0:00:19.560 --> 0:00:20.720 Tax direct. 0:00:22.480 --> 0:00:25.759 Taxes are due next Wednesday in the US, and while 0:00:25.800 --> 0:00:29.120 you put those finishing touches on your filing, many states 0:00:29.120 --> 0:00:31.880 are weighing what the future of taxes might look like 0:00:32.159 --> 0:00:36.680 for the country's wealthiest. California is weighing a ballot initiative 0:00:36.720 --> 0:00:39.600 to impose a one time well tax on residents worth 0:00:39.600 --> 0:00:43.680 one point one billion dollars or more. Massachusetts Senator Elizabeth 0:00:43.720 --> 0:00:46.960 Warren and Vermont Senator Bernie Sanders are pushing for new 0:00:47.000 --> 0:00:50.960 taxes on ultra millionaires and billionaires at the federal level, 0:00:51.440 --> 0:00:54.160 and New York City mayors or on Momdannie one on 0:00:54.240 --> 0:00:56.320 a promise to tax the wealthy two. 0:00:56.400 --> 0:00:59.080 And ultimately, the reason I want to increase these taxes 0:00:59.120 --> 0:01:01.680 on the top one percent the most profitable corporations is 0:01:01.720 --> 0:01:03.440 to increase quality of life for everyone. 0:01:03.920 --> 0:01:06.680 But the battle over whether and how to do this 0:01:07.080 --> 0:01:10.040 is pretty heated. Some of the people who'd be impacted 0:01:10.200 --> 0:01:14.080 argue that more taxes will stifle innovation, that they'll be 0:01:14.160 --> 0:01:14.959 forced to move. 0:01:15.360 --> 0:01:17.640 New Yorkers are going to flee. They're going to flee 0:01:17.680 --> 0:01:19.520 New York because of Zorod Mom Dannie. 0:01:19.640 --> 0:01:22.720 California is ultra rich, are threatening to leave the state 0:01:22.840 --> 0:01:24.639 over a proposed billionaire tax. 0:01:25.160 --> 0:01:29.480 This debate gets incredibly emotional, incredibly quickly. 0:01:29.920 --> 0:01:33.280 London based Bloomberg reporter Charlie Wells has been covering the 0:01:33.319 --> 0:01:36.800 worldwide movement to tax the rich from across the Atlantic, 0:01:37.280 --> 0:01:40.760 where European countries from the UK to France have been 0:01:40.800 --> 0:01:42.600 weighing similar proposals too. 0:01:43.200 --> 0:01:46.760 I always kind of think taxes are supposed to be boring, right, 0:01:46.840 --> 0:01:52.279 like it's just policy. But this speaks to how money 0:01:52.360 --> 0:01:54.000 really is a representation of power. 0:01:54.480 --> 0:01:57.200 So at a time when the US government has cut 0:01:57.240 --> 0:02:00.640 taxes on the nation's highest earners, it's the state of 0:02:00.640 --> 0:02:03.559 the push to do the opposite. And how have passed 0:02:03.600 --> 0:02:11.360 government's attempts to do this succeeded or failed. I'm Sarah Holder, 0:02:11.440 --> 0:02:14.440 and this is the big take from Bloomberg News Today. 0:02:14.440 --> 0:02:18.079 On the show, we unpacked the growing hotly debated push 0:02:18.240 --> 0:02:22.160 to tax the rich more, How could it work? Where 0:02:22.200 --> 0:02:25.560 has it happened before? And we take a closer look 0:02:25.600 --> 0:02:28.519 at New York City where Mayor Mom Dannie is fighting 0:02:28.560 --> 0:02:31.960 an uphill battle to tax the wealthy and pay for 0:02:32.040 --> 0:02:40.840 his campaign promises, Charlie, when we hear calls to tax 0:02:40.919 --> 0:02:44.160 the rich, there are a few ways we can interpret that. Right, 0:02:44.280 --> 0:02:48.320 Let's just start by defining those aren't the rich already taxed? 0:02:49.320 --> 0:02:52.880 If I were going to give people one takeaway in 0:02:52.919 --> 0:02:58.000 this whole debate about wealth taxes, about policy changes, it's 0:02:58.040 --> 0:03:02.280 to just remember that there are roughly three different ways 0:03:02.639 --> 0:03:06.000 that governments throughout time have taxed people. Right, So it's 0:03:06.080 --> 0:03:09.600 been on wealth, which is kind of what's in the news. 0:03:10.120 --> 0:03:13.000 It's been on income, and then it's been on consumption. 0:03:13.800 --> 0:03:16.520 Income taxes like the kind that come out of your paycheck, 0:03:16.960 --> 0:03:22.400 and consumption taxes like sales taxes, have their limitations. They 0:03:22.400 --> 0:03:26.760 collect levies on salaries, shopping or dining, but not on 0:03:26.919 --> 0:03:30.280 accumulated wealth like people's assets. 0:03:30.800 --> 0:03:34.520 What wealth tax advocates are saying is, hey, look, you know, 0:03:34.760 --> 0:03:38.160 income tax policy really isn't working. We need to tax 0:03:38.560 --> 0:03:42.520 the value of the assets that these people hold beyond income. 0:03:42.760 --> 0:03:47.160 Right, Wealthy people don't always make their money from traditional salaries. 0:03:48.200 --> 0:03:51.880 They may hold stocks, which can appreciate in value over time, 0:03:52.680 --> 0:03:55.600 or they may hold on to physical assets which are 0:03:55.640 --> 0:03:58.640 typically only taxed when they're sold, and. 0:03:58.560 --> 0:04:02.000 So valuing the properties, you know, maybe giving a break 0:04:02.000 --> 0:04:06.559 for a primary residence, looking at secondary, tertiary and beyond residences, 0:04:06.880 --> 0:04:11.040 looking at financial assets, looking at art, looking at wine collections, 0:04:11.400 --> 0:04:12.600 and then taxing that. 0:04:13.040 --> 0:04:16.080 The idea is to tax the value of these assets, 0:04:16.440 --> 0:04:20.720 because those assets, financial or otherwise are what can really 0:04:20.800 --> 0:04:23.520 help wealthy individuals get wealthier. 0:04:24.160 --> 0:04:27.359 These super wealthy people are basically able to say, you 0:04:27.400 --> 0:04:30.120 know what, I've got all these assets, I'm going to 0:04:30.200 --> 0:04:32.320 borrow against them for a really long time. So I'm 0:04:32.360 --> 0:04:33.760 not going to bring in a big income, and I'm 0:04:33.760 --> 0:04:36.120 going to borrow against these assets that i have, keep 0:04:36.120 --> 0:04:37.919 my tax right low, and then just pass those on 0:04:38.200 --> 0:04:40.040 to you know, my errors. 0:04:40.040 --> 0:04:44.000 For many generations, that's contributed to a wealth gap between 0:04:44.120 --> 0:04:47.920 the richest people and everyone else, a gap that in 0:04:47.960 --> 0:04:49.880 the US is only growing. 0:04:50.279 --> 0:04:53.799 So this group of economists at Berkeley took a look 0:04:54.080 --> 0:04:57.600 at the accumulative assets of the four hundred richest American 0:04:57.600 --> 0:05:03.000 households in the United States teteen eighty two. Those families 0:05:03.040 --> 0:05:06.320 are a cumula of assets made up two percent of GDP. 0:05:06.960 --> 0:05:09.760 Now it's twenty percent. So you see this you see 0:05:09.760 --> 0:05:11.960 this big increase, right, four hundred of the richest families. 0:05:12.279 --> 0:05:14.279 Those families, over that time, they've had an increase in 0:05:14.320 --> 0:05:17.159 wealth of about seven point five percent a year. You 0:05:17.160 --> 0:05:20.279 think about income growth for the average American one point 0:05:20.320 --> 0:05:22.280 five percent of a year. So that's a part of it, right, 0:05:22.320 --> 0:05:25.760 It's this kind of growth in inequality, right, a small 0:05:25.839 --> 0:05:28.120 number of people holding this big amount of assets. 0:05:28.440 --> 0:05:32.120 As inequality widens, there's been a debate over how and 0:05:32.320 --> 0:05:35.560 whether the government should be capturing more of that wealth 0:05:35.800 --> 0:05:36.760 through taxation. 0:05:37.040 --> 0:05:39.279 So this group of economists at Berkeley, the same group, 0:05:39.640 --> 0:05:42.520 they looked at effective tax rates, right, so the amount 0:05:42.520 --> 0:05:45.919 of tax that these really wealthy people pay. And what 0:05:45.960 --> 0:05:48.760 they found is that the effective tax of the top 0:05:49.160 --> 0:05:53.120 one hundred households in the United States was about twenty 0:05:53.160 --> 0:05:56.799 two percent on average. Compare that even to the top 0:05:56.920 --> 0:05:59.320 tax rate for people in the top income bracket. Right, 0:05:59.320 --> 0:06:01.679 So someone who might be making like five hundred thousand 0:06:01.720 --> 0:06:03.479 dollars a year, they're working at a bank, they're working 0:06:03.520 --> 0:06:07.480 incredibly hard, their tax rate is forty five percent, right, 0:06:07.520 --> 0:06:10.760 So these incredibly wealthy people twenty two percent. People who 0:06:10.760 --> 0:06:12.440 are working a lot, who are getting their money through 0:06:12.520 --> 0:06:15.880 income forty five percent, and then for the entire population 0:06:15.920 --> 0:06:17.440 on average, it's about thirty percent. 0:06:18.120 --> 0:06:21.880 It's a pretty stark divide, and that imbalance exists in 0:06:21.960 --> 0:06:26.400 other countries too, So increasingly around the world there's been 0:06:26.440 --> 0:06:30.240 momentum around designing tax policy to account not only for 0:06:30.360 --> 0:06:35.479 income but for assets. Norway, Switzerland, and Spain all levy 0:06:35.560 --> 0:06:39.200 taxes on citizens whose wealth is valued over a certain threshold. 0:06:39.839 --> 0:06:43.120 Some have done it for centuries. The Netherlands has its 0:06:43.160 --> 0:06:46.839 own levee that effectively works as a wealth tax. The 0:06:47.000 --> 0:06:50.200 US has never had a federal wealth tax, but at 0:06:50.240 --> 0:06:53.960 the local level, lawmakers across the country have been pushing 0:06:54.000 --> 0:06:54.800 for them, and so. 0:06:54.760 --> 0:06:56.719 There have been a number of proposals in Europe, in 0:06:56.720 --> 0:06:58.880 the United States, and number of states that say, hey, look, 0:06:59.240 --> 0:07:02.800 let's take the value of wealth tax that you know 0:07:02.880 --> 0:07:05.760 at a low percentage point, say two percent. You've had 0:07:05.800 --> 0:07:09.200 calls for a global tax. This is from Gabrielle Zuckman, 0:07:09.520 --> 0:07:12.560 the French economist, saying we need a global two percent 0:07:12.600 --> 0:07:15.640 tax on wealth, not just income. We also have a 0:07:15.680 --> 0:07:18.560 call in California that's been really getting a lot of attention, 0:07:19.000 --> 0:07:23.400 this ballot initiative for a one time five percent levy 0:07:23.520 --> 0:07:26.720 on assets of residents of California who have a net 0:07:26.760 --> 0:07:30.320 worth of one point one billion or more. So this 0:07:30.520 --> 0:07:32.840 push to look not just at income but to look 0:07:32.880 --> 0:07:33.480 at assets. 0:07:34.000 --> 0:07:37.360 What are the goals of lawmakers and advocates who back 0:07:37.440 --> 0:07:42.320 these kinds of taxes. Is it only about raising revenue? 0:07:42.560 --> 0:07:47.800 There are pressures that governments across the world face. Growth 0:07:47.800 --> 0:07:51.440 has slowed, interest rates are higher, we have populations living longer. 0:07:51.440 --> 0:07:55.080 There's a lot of pressure on government budgets. I would say, 0:07:55.320 --> 0:07:58.000 based on my reporting, that is the number one aim 0:07:58.120 --> 0:08:02.400 is to close gaps. There also is this issue of perception, 0:08:02.960 --> 0:08:05.120 and a lot of the policy experts I talked to 0:08:05.200 --> 0:08:09.520 said that if you have this wide spread sense of 0:08:09.680 --> 0:08:13.280 unfairness in a system, there is a need in some 0:08:13.400 --> 0:08:16.720 way to rectify it or at least make people feel 0:08:16.760 --> 0:08:18.040 like it's being addressed. 0:08:19.240 --> 0:08:21.920 Charlie says part of the reason some US states are 0:08:21.960 --> 0:08:25.560 so motivated to increase taxes on rich Americans is to 0:08:25.680 --> 0:08:30.080 offset recent federal tax cuts benefiting higher income earners that 0:08:30.120 --> 0:08:34.560 were extended and expanded last year. But actually implementing a 0:08:34.600 --> 0:08:38.719 wealth tax is easier said than done. France actually used 0:08:38.760 --> 0:08:41.440 to have a wealth tax in the nineteen nineties, so 0:08:41.559 --> 0:08:45.400 did about a dozen other countries. Over time, many of 0:08:45.440 --> 0:08:47.440 them were phased out because. 0:08:47.240 --> 0:08:49.520 They just didn't bring in the sort of revenue that 0:08:50.120 --> 0:08:54.360 advocates hoped. And you know, one business school professor told me, basically, 0:08:54.440 --> 0:08:57.560 you know what, both sides here tend to overestimate the 0:08:57.600 --> 0:09:00.760 efficacy or the danger of wealth tax. You know, they 0:09:00.800 --> 0:09:03.880 never bring in a huge amount of revenue. The percentage 0:09:03.880 --> 0:09:06.680 that they take is usually you know, between one percent 0:09:06.760 --> 0:09:10.240 to about three percent. There's sort of a substitute for 0:09:10.320 --> 0:09:12.800 other taxes that maybe some of these countries don't have. 0:09:13.520 --> 0:09:16.640 There are also challenges when it comes to calculating them. 0:09:17.040 --> 0:09:20.600 There are administrative issues, right, so if you think about 0:09:20.640 --> 0:09:24.440 what a wealth tax is, you're tallying up the value 0:09:24.679 --> 0:09:28.880 of all the stuff that someone owns every year and 0:09:28.920 --> 0:09:30.720 then figuring out how much you're going to tax on that. 0:09:30.800 --> 0:09:34.040 Like that is a really big administrative challenge. And so 0:09:34.080 --> 0:09:35.960 it can sound really simple to say, oh, okay, all 0:09:36.000 --> 0:09:38.959 we got to do is two percent wealth tax around 0:09:39.000 --> 0:09:43.760 the world done. Making that happen is hard, it's expensive. 0:09:45.160 --> 0:09:49.320 But the other big problem is rich people tend to 0:09:49.400 --> 0:09:49.880 hate them. 0:09:50.200 --> 0:09:54.440 One of the most experienced tax advisors, I spoke with 0:09:54.480 --> 0:09:58.360 who helps wealthy people with their tax planning. What she 0:09:58.480 --> 0:10:01.760 said to me was which people have a lot of 0:10:01.760 --> 0:10:03.720 resources to lobby against the sort of thing. 0:10:04.080 --> 0:10:05.319 That's what happened in the UK. 0:10:05.600 --> 0:10:08.280 Britain is a really interesting case because it's sort of 0:10:08.320 --> 0:10:11.680 between Europe and the United States. So like the United States, 0:10:11.679 --> 0:10:15.840 it has never had a full on wealth tax, but 0:10:16.080 --> 0:10:19.200 it faces similar pressures that a lot of advanced economies have, 0:10:19.400 --> 0:10:22.920 that issue of slowing growth, that issue of a consumer understrain, 0:10:23.080 --> 0:10:26.880 that issue of inequality. And over the past you know, 0:10:26.920 --> 0:10:30.720 two years roughly since the Labor government has come into power, 0:10:31.080 --> 0:10:34.560 there has been pressure on the government in the United Kingdom, 0:10:34.960 --> 0:10:37.480 at least in the Labor Party from the left flank 0:10:37.480 --> 0:10:40.199 of that party, to bring in something like a wealth tax, 0:10:40.400 --> 0:10:43.280 and that kind of mirrored some policy discussions that we 0:10:43.280 --> 0:10:47.040 were also seeing in France. But in both countries these policies, 0:10:47.040 --> 0:10:49.480 at least right now, from the parties in power, have 0:10:49.600 --> 0:10:51.920 not come into place, and I think that's because there 0:10:52.000 --> 0:10:54.280 was a lot of debate. There were a lot of 0:10:54.360 --> 0:10:58.240 threats from incredibly wealthy people to leave, and I think 0:10:58.280 --> 0:11:00.800 the threat of departures has been very, very real and 0:11:00.920 --> 0:11:03.760 very very live in the UK, as you saw a 0:11:03.760 --> 0:11:07.239 lot of wealthy people either go to lower tax jurisdictions 0:11:07.320 --> 0:11:10.120 or threatened to go, And I think that really scared the. 0:11:10.080 --> 0:11:15.679 Government, Charlie. How often do people actually leave? What is 0:11:15.720 --> 0:11:18.600 the data say about how these measures have played out 0:11:18.640 --> 0:11:19.240 over time. 0:11:19.559 --> 0:11:21.400 A lot of these policies have not really been in 0:11:21.440 --> 0:11:25.480 place for really long enough to see what would actually happen. 0:11:25.559 --> 0:11:27.160 And I think that's in a lot of ways why 0:11:27.559 --> 0:11:30.880 a wealth tax in the modern era is such an experiment. 0:11:31.200 --> 0:11:34.400 And so there's some numbers coming out of Massachusetts where 0:11:34.400 --> 0:11:36.560 you didn't have a wealth tax, but you saw this 0:11:36.679 --> 0:11:41.080 four percent surcharge on people from twenty twenty three who 0:11:41.440 --> 0:11:44.280 had an income of over a million dollars, and what 0:11:44.320 --> 0:11:49.920 you saw was a big amount of you know, assets leaving, 0:11:50.559 --> 0:11:54.520 but also a big amount of revenue coming in. Residents 0:11:54.760 --> 0:11:59.119 exiting Massachusetts took a net four point two billion dollars 0:11:59.160 --> 0:12:01.960 in adjusted gross and come with them in twenty twenty three. 0:12:02.200 --> 0:12:04.480 But then again, you can make another story here when 0:12:04.520 --> 0:12:07.920 you look at the Massachusetts government brought in more than 0:12:07.960 --> 0:12:11.880 six billion dollars in revenue from this policy, and so 0:12:12.360 --> 0:12:13.959 it's easy to kind of slice and dice I think 0:12:14.000 --> 0:12:16.959 another thing is people are always coming and going right. 0:12:17.040 --> 0:12:20.040 Wealthy people are very mobile. There's also a lot of entries. 0:12:20.120 --> 0:12:22.520 There's a lot of re entries. It's really easy to 0:12:22.559 --> 0:12:25.560 hear one number and think that the sky is falling, 0:12:25.800 --> 0:12:27.559 but look at the other numbers, right, and I think 0:12:27.559 --> 0:12:29.640 we need that data over time. We don't have it yet. 0:12:32.880 --> 0:12:35.080 After the break, we zoom in on one of the 0:12:35.200 --> 0:12:38.720 closest watched battles over a plan to raise taxes on 0:12:38.840 --> 0:12:42.640 high earners playing out in the richest city in the country. 0:12:51.160 --> 0:12:52.760 I think we need to increase taxes on the top 0:12:52.800 --> 0:12:55.760 one percent by two percent. Why we need to raise 0:12:55.760 --> 0:12:57.720 the state's top corporate tax right to match that out 0:12:57.720 --> 0:12:59.559 of New Jersey, and in doing so, this would raise. 0:12:59.559 --> 0:13:03.400 Nine New York City mayors or on. Mamdani was elected 0:13:03.480 --> 0:13:06.240 on a progressive platform that he pledged to pay for 0:13:06.360 --> 0:13:10.760 with higher taxes on higher earners and big corporations. But 0:13:10.800 --> 0:13:13.480 instead of pushing a wealth tax proposal like in Spain 0:13:13.640 --> 0:13:16.640 or California, trying to levy taxes on the wealth that 0:13:16.800 --> 0:13:20.720 lives in yachts or fine wine, Mam Donnie is focusing 0:13:20.760 --> 0:13:25.400 on boosting taxes on wealthier New Yorker's income. The plan 0:13:25.880 --> 0:13:28.600 has a lot of people riled up. 0:13:29.040 --> 0:13:32.480 I would hazard a guess that part of the reason 0:13:32.640 --> 0:13:34.800 this is getting so much attention is because of the 0:13:34.840 --> 0:13:35.760 mayor himself. 0:13:35.880 --> 0:13:40.120 Bloomberg reporter Laura Namias covers New York state and city politics. 0:13:40.280 --> 0:13:44.199 He attracts incredible amount of attention, both good and bad, 0:13:44.880 --> 0:13:49.760 and so this idea is drawing even more criticism than 0:13:49.920 --> 0:13:50.840 it usually has. 0:13:51.200 --> 0:13:54.800 Mam Donnie has proposed raising corporate taxes and increasing the 0:13:54.840 --> 0:13:57.240 tax rate on New Yorkers who make over a million 0:13:57.320 --> 0:14:00.480 dollars a year, And since he can't raise in or 0:14:00.480 --> 0:14:03.720 corporate taxes himself at the city level, he needs the 0:14:03.760 --> 0:14:07.120 state to act. That's proving difficult. 0:14:07.679 --> 0:14:12.400 Previous millionaire tax income hikes have been proposed in response 0:14:12.440 --> 0:14:16.439 to economic downturns or like huge economic problems after the 0:14:16.720 --> 0:14:20.840 Great Recession amid the COVID pandemic. Those were the times 0:14:20.840 --> 0:14:23.360 when there was the most political support in Albany for 0:14:23.480 --> 0:14:28.200 raising the taxes. And we're not technically in a downturn, 0:14:28.360 --> 0:14:32.920 So there's some concern about using this lever at a 0:14:32.960 --> 0:14:37.400 moment when it's not like of maximum importance, or is 0:14:37.440 --> 0:14:40.320 this the pull lever in case of emergency or should 0:14:40.400 --> 0:14:42.240 we just pull it whenever we feel like it. 0:14:43.080 --> 0:14:46.480 Mam Donnie is facing pushback from Albany right now, where 0:14:46.520 --> 0:14:49.720 New York Governor Kathy Hokeel has resisted boosting the tax 0:14:49.800 --> 0:14:52.680 rate at all. The back and forth is an example 0:14:52.720 --> 0:14:56.520 of the political challenges that proposals to fund progressive measures 0:14:56.520 --> 0:14:58.480 with taxes on the wealthy can face. 0:14:59.080 --> 0:15:04.160 Mayor Mom Donnie was elected on this platform of providing 0:15:04.520 --> 0:15:08.480 a couple of really bold campaign promises that were pretty expansive. 0:15:08.800 --> 0:15:11.040 Now he has said that he would take whatever money 0:15:11.080 --> 0:15:13.960 he could get to fund the programs. But after his 0:15:14.040 --> 0:15:19.240 election and this year, he announced that the city was 0:15:19.320 --> 0:15:25.400 facing a massive budget deficit, so he is agitating heavily 0:15:25.480 --> 0:15:27.680 for tax increases at the state level. 0:15:27.960 --> 0:15:31.640 Mam Donnie has also offered a counter proposal, something he 0:15:31.760 --> 0:15:37.080 does have control over as mayor, raising property taxes across 0:15:37.120 --> 0:15:37.480 the board. 0:15:37.920 --> 0:15:40.400 Faced with no other choice, the city would have to 0:15:40.400 --> 0:15:44.040 exercise the only revenue lever fully within our own control. 0:15:44.640 --> 0:15:46.520 We would have to raise property. 0:15:46.160 --> 0:15:52.000 Taxes that would require city council approval. So far, Mamdannie's 0:15:52.040 --> 0:15:56.040 hardball at both the city and state level has hit 0:15:56.280 --> 0:16:00.960 political roadblocks. Hokl has continued to reiterate that she doesn't 0:16:01.000 --> 0:16:04.360 want to increase income taxes. Here she is speaking at 0:16:04.400 --> 0:16:05.880 a Politico summit in March. 0:16:06.160 --> 0:16:08.080 What I want to make sure we are smart about 0:16:08.840 --> 0:16:12.360 is having a system in place where it's not just 0:16:12.520 --> 0:16:16.720 taxing for the sake of taxing, and being conscious of 0:16:16.760 --> 0:16:20.280 the facts that I need people who are high net 0:16:20.280 --> 0:16:23.640 worth to support the generous social programs that we want 0:16:23.680 --> 0:16:24.440 to have in our state. 0:16:25.440 --> 0:16:29.160 She's facing a re election fight in November in a 0:16:29.200 --> 0:16:32.880 state that is not as blue as New York City is. 0:16:33.280 --> 0:16:38.200 Without her approval, it's very unlikely that a tax increase 0:16:38.360 --> 0:16:41.400 could go through. I mean, New York State has raised 0:16:41.440 --> 0:16:45.440 income taxes repeatedly. It's not a totally out there idea 0:16:45.480 --> 0:16:49.840 at all, and it pulls incredibly well. There's more than 0:16:50.120 --> 0:16:54.800 a simple majority support for raising income taxes on millionaires. 0:16:54.840 --> 0:16:57.920 And that's not like a new phenomenon either. For years 0:16:57.960 --> 0:16:59.680 and years, I think that that has been the case. 0:17:00.400 --> 0:17:02.720 People support the idea of taxing the rich. It's just 0:17:02.760 --> 0:17:04.760 that there are a lot of taxes already. 0:17:04.880 --> 0:17:08.840 I mean, from Mamdani's perspective, why focus on increasing income 0:17:08.880 --> 0:17:12.639 tax We've seen other proposals that are focused on taxing wealth. 0:17:13.080 --> 0:17:15.760 I think he's not opposed to wealth taxes. It's just 0:17:15.800 --> 0:17:21.159 incredibly difficult to do in practice, and income taxes work 0:17:21.280 --> 0:17:23.800 in New York. It yields a tremendous amount of revenue. 0:17:23.800 --> 0:17:27.600 It's easier to catch. The state Tax Department is like 0:17:27.720 --> 0:17:31.760 notorious or lauded depending on where you're coming from for 0:17:31.800 --> 0:17:34.840 their ability to track people and track their residency and 0:17:34.880 --> 0:17:37.879 make sure that people are paying. But a wealth tax 0:17:37.960 --> 0:17:40.720 is just very difficult to do on a state level. Well. 0:17:40.800 --> 0:17:42.920 One of the concerns that often comes up around these 0:17:42.960 --> 0:17:45.960 local or state level wealth tax proposals is that businesses 0:17:46.040 --> 0:17:48.960 or wealthy individuals will just leave rather than pay, which 0:17:48.960 --> 0:17:52.480 could lead to further economic strains. How is that dynamic 0:17:52.520 --> 0:17:55.440 potentially different in a city like New York, which has 0:17:55.520 --> 0:17:58.639 all of these other reasons that people move here and 0:17:58.680 --> 0:17:59.160 want to stay. 0:18:00.000 --> 0:18:03.879 Actually shows that it's inconclusive. The last time that New 0:18:03.960 --> 0:18:06.600 York raised taxes on millionaires, it did not appear to 0:18:06.720 --> 0:18:09.600 lead to an exodus of rich people out of the state. 0:18:10.200 --> 0:18:12.320 The kind of people who can afford to live anywhere, 0:18:12.560 --> 0:18:16.320 It doesn't They're not that sensitive to changes in income taxes. 0:18:16.800 --> 0:18:22.040 The data suggests more that people are leaving from more 0:18:22.119 --> 0:18:26.440 middle income brackets than from the very top, and that 0:18:26.440 --> 0:18:30.959 that is potentially likely because of housing prices, which is 0:18:31.000 --> 0:18:34.320 just another one of these cost pressures that people face. 0:18:34.760 --> 0:18:38.600 But what some detractors would say, and groups like the 0:18:38.640 --> 0:18:41.480 Citizen Budget Commission, which is sort of this non partisan 0:18:41.520 --> 0:18:45.120 budget watchdog that also opposes increasing income taxes, they would 0:18:45.160 --> 0:18:48.480 say that New York's share of the number of millionaires 0:18:48.480 --> 0:18:52.639 in the country has shrunk compared to other states. New 0:18:52.720 --> 0:18:56.480 York State is so reliant on the income taxes from 0:18:56.880 --> 0:19:00.480 incredibly wealthy people that if a few people leave who 0:19:00.480 --> 0:19:03.080 are extraordinarily wealthy, that could have an impact on the 0:19:03.080 --> 0:19:05.639 state's bottom line, and they use that revenue to fund 0:19:05.640 --> 0:19:08.680 things that are just sort of baseline expenses like medicaid 0:19:08.840 --> 0:19:10.320 and school funding. 0:19:12.560 --> 0:19:14.960 New York City has a deadline of June thirtieth to 0:19:15.040 --> 0:19:19.240 adopt a balanced budget. New York State's deadline was April first. 0:19:19.720 --> 0:19:22.679 They've blown past that, but the budget is expected to 0:19:22.680 --> 0:19:25.560 be done in the coming weeks, and regardless of where 0:19:25.560 --> 0:19:29.400 they land on Mamdani's hoped for tax changes and how 0:19:29.480 --> 0:19:34.000 other proposals across the country shakeout, Bloomberg's Charlie Wells reminds 0:19:34.080 --> 0:19:37.280 us that in the US and in the UK, even 0:19:37.400 --> 0:19:42.200 the concept of income taxes for anyone was an experiment 0:19:42.400 --> 0:19:43.240 once upon a time. 0:19:43.560 --> 0:19:46.960 There's incredible debate on whether or not it was even 0:19:47.000 --> 0:19:50.160 appropriate to tax income. There were a lot of concerns 0:19:50.200 --> 0:19:53.119 that the government asking people how much money they made 0:19:53.480 --> 0:19:55.720 was this huge invasion of privacy. There were kind of 0:19:55.880 --> 0:19:59.240 national debates about this. So this incredible kind of push 0:19:59.280 --> 0:20:03.800 pull something that now feels very normal, It feels very 0:20:03.840 --> 0:20:07.520 not controversial. There's a world where the changes that we're 0:20:07.560 --> 0:20:09.280 seeing in the economy, the changes that we're seeing and 0:20:09.320 --> 0:20:13.080 tax policy kind of have that kind of influence on 0:20:13.119 --> 0:20:13.800 a wealth tax. 0:20:19.560 --> 0:20:22.520 This is the Big Take from Bloomberg News. I'm Sarah Holder. 0:20:22.880 --> 0:20:25.480 To get more from The Big Take and unlimited access 0:20:25.520 --> 0:20:29.399 to all of Bloomberg dot com, subscribe today at Bloomberg 0:20:29.440 --> 0:20:32.920 dot com slash podcast Offer. If you liked this episode, 0:20:33.040 --> 0:20:35.679 make sure to subscribe and review The Big Take wherever 0:20:35.720 --> 0:20:38.600 you listen to podcasts. It helps people find the show. 0:20:39.400 --> 0:20:41.520 Thanks for listening. We'll be back tomorrow.