New York’s Democrat Mayor, Bill de Blasio, is determined to tackle the massive inequality in the city. To this end, he has announced his intention to increase the income taxes on the mega-wealthy. He is only talking about a half a percent rise, a proposal he expects to be negligible to the moneyed elite. It will only be the cost of a small soy latte each day. The increased revenues will go straight towards pre-kindergarten programs, as he believes that education is the key to breaking the stranglehold of poverty. He will also fund more after-school care.
Mayor de Blasio is not expecting a great deal of opposition to his plans which were popular in his campaign and won him a 73% majority. He thinks that many of the rich are keen to give something back, and that investing in society and the future of all New Yorkers is a concept understood and supported by most wealthy individuals. The 0.5% hike would be applied to households earning $500,000 a year, or more.
Park Avenue is a long street that dissects the island of Manhattan. It is highly illustrative of the divide in the Big Apple, that some are now calling the Rotten Apple. At one end is some of the expensive and luxurious real estate in the world. There are apartments worth $100 million and more. Inside those properties the occupants live lives of unabashed lavish expenditure. There are 70 billionaires in New York and almost 400,000 have a net worth of more than a million
Travel down Park Avenue to the Bronx, and it is a different story. People exist in public housing blocks that have seen much better days. Crime is high, so in unemployment, and many depend on handouts to eat. With poverty defined as living on $23,000 a year, more than 21% of New Yorkers in the poorer areas are suffering.
But there’s a twist to this tale of two cities. Whilst Mayor de Blasio is popular for his plans, he has to get them past Governor Andrew Cuomo. It’s not that Cuomo is opposed to the extension of pre-school kindergarten for every child. He supports it. But the two men differ in how to pay for it. Cuomo is running for Governor again and he is on a ticket that vows to retract on taxes, not to increase them. To get past the deadlock, Cuomo is offering state money to pay for the program. He has $2 million in surplus to play with.
De Blasio has refused the offer from Cuomo. He wants a reliable and ongoing source of funding and he believes that the tax on the super-rich is the way to achieve that. The two men remain at loggerheads, despite both wanting the same thing. Cuomo has now slapped another $1 million on the table, offering to keep the pre-k going across the entire state for a further five years.
Underlying the tussle is a moral issue. De Blasio does not want to let go of his Robin Hood philosophy, not just because the voters like it, but also because it is deeply symbolic. This has earned him some crticism, that he is hanging onto his tax idea as a left-wing and populist move. By not accepting the deal, it could suggest he is more interested in the ideological principle than in the actual childcare and benefits that will bring to families.
Governor Cuomo is at the conservative end of the spectrum, although also a Democrat. His supporters depend on him to keep his promises not to raise their taxes. This might be way out of kilter with the national mood, but his political survival needs him to stick to his guns on this.
It is arguable that the Occupy movement, the re-election of Obama, and the election of de Blasio to New York’s Mayor are all signs that the country was and is ready for social change of magnitude, and ready to address the deep inequality that creates an ever greater gap between the rich and the poor.
Political commentators are watching closely as to which way Cuomo may turn. He may be forced to concede his anti-tax stance if it looks like he is not as determined as de Blasio to take steps to close the income chasm. It is a theme that is expected to emerge in President Obama’s State of the Union address next week.
“The people of this city have given me a mission” said de Blasio this week. He wants to tax the wealthy and it looks like he won’t rest until he can. Compromise does not appear to be on his agenda and the sacrifice of those soy lattes certainly is.
By Kate Henderson