Governor Cuomo Nixes Millionaires Tax but Extends Multimillionaires Tax—An Outcome of the Occupy Movement?

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December 7, 2011; Source: New York PostThe word “nonprofit” never appears in this New York Post article, but there is a big lesson here for nonprofit advocates. Governor Andrew Cuomo campaigned for office on a pledge to scrap New York’s special “millionaires’ tax” that had been enacted by his predecessor in office to get the state out of some of its fiscal nightmare. That might have happened had it not been for the unruly encampment in Zuccotti Park, which changed some of the debate around tax rates that apply to the top 1 percent versus the bottom 99 percent. Cuomo had been concerned that the 8.97 percent tax on millionaires (actually applicable to households earning $500,000 or more) could end up driving millionaires out of state, but after the Occupy Wall Street movement emerged with its epicenter in Manhattan, the debate around the millionaires’ tax shifted. Cuomo began to get push back from members of his own party, including some whose track records hardly suggested that they would have ever been in anything like a Zuccotti Park tent. It wasn’t that the Occupiers had recruited some hotshot lobbying firm to buttonhole legislators and out-argue the argumentative governor, but they changed the context and frame of the New York State tax debate.

Now the Governor has OK’d a tax deal that gives the middle class a tax break but sets a tax of 8.82 percent on multimillionaires (earning $2 million or more). So millionaires got a break from the 8.97 tax, but 30,000 multimillionaires in the state will still be taxed at almost the same amount. For families earning between $40,000 and $150,000, the tax rate will be 6.45 percent, which the governor described as “the lowest tax rate for middle-class families in 58 years.” The rate for families earning between $150,000 and $300,000 will be 6.65 percent. All told, middle class families between $40,000 and $300,000 will be paying less than they did under the tax structure that the Governor inherited.

Governor Cuomo gets to take credit for reducing the taxes of all New Yorkers and maintaining a relatively high tax rate applicable to multimillionaires, sacrificing a little in revenue, but hardly giving away the store to the 1 percenters. Do you think this wouldn’t have happened without the advent of the Occupy Wall Street movement? The Occupy Wall Street movement doesn’t appear to be one of well-heeled lobbyists tromping the halls of Congress and state capitols, but one that has succeeded in a way—at least for the moment—in changing the “frame” of the public debate on the economy. As UC Berkeley linguistics professor George Lakoff recently wrote for Alternet:

What lies behind the Occupy movement is a moral view of democracy: [d]emocracy is about citizens caring about each other and acting responsibly both socially and personally. This requires a robust Public empowering and protecting everyone equally. Both private success and personal freedom depend on such a Public . . . What the Occupy movement can’t stand is the opposite “moral” view, that [d]emocracy provides the freedom to seek one’s self-interest and ignore what is good for other Americans and others in the world. That view lies behind the Wall Street ethic of the Greedy Market, as opposed to a Market for All, a market that should maximize the well-being of most Americans.

That moral vision seems to have moved Governor Cuomo, Democratic Assembly Speaker Sheldon Silver (who was, surprisingly, ahead of the Governor in picking up on the OWS cues), Republican Senate Majority Leader Dean Skelos (who signed off on the deal), lobbyist and Real Estate Board of New York prez Stephen Spinola (who said the deal “sends the right message to the business community”), and Republican Party supporter, investment banker, and Home Depot founder Kenneth Langone (who described Cuomo as a “realist” and said, according to the New York Post, that “the plan addresses the state’s needs without creating an environment that drives New Yorkers out”).
Would this have happened at this time in New York State without the Occupy movement? We wonder—do you?—Rick Cohen