Monday, June 16, 2008

Chickens Coming Home to Tax Roost

Mike Bloomberg, aside from his great wealth, is one pretty lucky fellow when it comes to politics. In 2001 he comes out of nowhere on the heels of 9/11, and the endorsement of a then iconic mayor, to narrowly win the mayoral election. With the economic crisis that followed the terrorist attack, Mayor Mike was able to raise taxes without any real examination of methods that would have allowed for alternative strategies in the area of government reinvention-a term that was simply alien to Mike and the Koch retreads that he brought with him into government.

After the economic downturn, the city experienced a major uptick in revenues as Wall Street came roaring back. Through all of this Blomberg was able to articulate (and practice) a political philosophy that envisions government as a "consumer friendly" dispenser of services to the needy. In fact, his public health philosophy is emblematic of his entire approach to government (the opposite of the Reaganesque lampooning of the phrase, "We're from the government and we're here to help you.")

So it's no surprise that, faced with looming deficits, Bloomberg reverts back to what he knows best-revenue enhancements through the milking of the city's tax payers. As the NY Times reported on Saturday: "With the economy in the doldrums, Mayor Michael R. Bloomberg said on Friday that the city might scrap a popular tax cut for homeowners in 2009 — a step he previously said he would try to avoid."

It will not be easy, however, since so many of the City Council members are facing new political challenges in the upcoming election cycle. As Councilman Eric Gioia told the Times: “Middle-class families are under siege,” said Councilman Eric N. Gioia of Queens. “Raising their taxes now, at a time when they can least afford it, would be a mistake.”

And he's right, of course. As gas and food prices rise through the roof it's not the best of times to start taking more money out from the homeowners that the mayor and the council socked it to in 2002; especially when there's still a budget surplus: "Such a tax increase could prove especially unpopular given that the city is expected to end 2008 with a $4.6 billion budget surplus, according to the city’s Independent Budget Office. But the mayor’s office said that those funds were already tied up in future budgets."

The use of words like "responsible" and "prudent" generally typify the "we have to raise revenue" crowd (like the Times editorialists and the tax gougers at the DMI). They all should take a look at all of the supermarket entrepreneurs who are leaving the city to invest their money in more tax-friendly environs.

There's a cost to all of this taxing and over regulating. The NY Post gets this in its editorial on Saturday: "What Mayor Mike taketh, Mayor Mike giveth back - and then later, it seems, taketh away again. That's the storyline of that huge 18 percent property-tax hike he slapped on New Yorkers, citing post-9/11 budget woes, in his very first year as mayor...Some perspective: City taxes were already way too high when Bloomberg took office in '02. Indeed, he campaigned for office arguing that, despite the post-9/11 downturn, New York can't tax its way out of a recession - that jacking up levies would only further harm the economy. Yet, there he was - less than a year later - imposing a stiff tax hike."

So his $80 2001 million campaign charade was just that; it camouflaged his true philosophy as he pained Mark Green as a flaming liberal. So the Post actually gets it wrong when it urges the mayor to reach back for the "old Mike."-"But Hizzoner was right the first time: Hiking taxes will hurt the economy. Not to mention, it's unfair. Outrageously so, in fact. Mayor Mike should channel the old Mike - and reject any notion of yet another tax hike. End of story."

The old Mike was a fiction, like so much else we've had to swallow over the past six and a half years from the man who really had no answers since, as far as government was concerned, he simply didn't even know what the questions were.