Most of the states in the northeastern U.S. were founded by one or another group of religious dissenters, but not New York. From its first days as a Dutch colony (New Amsterdam), New York was a commercial and trading city, where the denizens' first and foremost purpose was making money.
Today it seems that we hate the making of money, and our focus has become to punish it. In other cities, they recognize that they have a limited number of wealth creators. Most cities with a large and dominant employer or factory just don't systematically persecute that employer until it gives up and leaves.
In New York, our equivalent of the large and dominant factory is our main home town industry, the financial industry. This industry creates vast amounts of wealth and pays far more than its proportionate share of taxes. Most any city in the world would kill to have our financial industry.
So, needless to say, the way for a politician to get ahead in New York is to run against the financial industry. Think Eliot Spitzer. During his tenure as Attorney General (2003 - 06) he came up with a prosecution against essentially every major bank in New York. Can anybody even remember the basis for the charges? (Doesn't matter, but the main one was that having investment banking and research in the same institution led to biased research reports, or something like that.) The banks paid over $1 billion of protection money. Lots of press conferences! Lots of headlines! Next thing you know, Spitzer was elected governor. Now his successor is trying the same strategy. We'll see if it works.
Of course there is more than one way to attempt economic suicide, and in New York, caught up in the trendy ideologies of the day, we're willing to try them all. Joel Kotkin has a post today at New Geography called "The Blue-State Suicide Pact." As readers here know, I have focused some on the state/local income tax deduction currently up for cut-back or elimination, and the disproportionate effect that that change would have on New York and the other deep blue states like California, New Jersey and Connecticut. Kotkin takes a broader view, and looks at a wider swath of the proposed changes. One by one they disproportionately affect the blue states, because disproportionately those states are where the highest concentrations of high earners live.
The people whose wallets will be drained in the new war on “the rich” are high-earning, but hardly plutocratic professionals like engineers, doctors, lawyers, small business owners and the like. Once seen as the bastion of the middle class, and exemplars of upward mobility, these people are emerging as the modern day “kulaks,” the affluent peasants ruthlessly targeted by Stalin in the early 1930s.
And who is leading the charge for these changes? Why, the heavily Democratic congressional delegations of the main blue states: New York, California, Connecticut, New Jersey, Illinois.
Consider the main tax changes on the table:
(1) Raise top marginal rates. That hits mainly the highest income people, disproportionately concentrated in the deep blue states.
(2) Restrict home mortgage interest deduction. The highest housing prices are in the big cities in the deep blue states: New York, LA, San Francisco and vicinity.
(3) Restrict or eliminate the state/local income tax deduction. Well over half of the value of this deduction goes to just New York and California, and within those states, to residents of the heavily Democratic major cities, New York, LA, San Francisco and Silicon Valley.
Why do we bring this upon ourselves? I guess we need to do penance for our sins. I can't think of any other reason.
Meanwhile, from today's headlines, Citibank announced another 11,000 layoffs (not all in New York). Their total of employees is down from 375,000 in 2007 to 262,000 today. Not direct cause and effect, but constant persecution can't be good for them.