'Fairness' Fallacy: The Error In NYC Politicians' Pleas For Cash
Like toddlers, New York's politicos are obsessed with “fairness” — but it's only “fair” when it benefits them.
Last week, Mayor de Blasio went to Albany to “urge” lawmakers and the governor “to ensure . . . that the city gets its fair share” of state cash.
Comptroller Scott Stringer, the city's elected fiscal watchdog, similarly said, “We have to fight to get our fair share” from Albany and Washington.
In fact, a more “fair” system would see New York getting less money.
What does “fair” mean? When it comes to the city budget, it means we should get a lot out of Albany and Washington — because we put a lot of tax dollars into them.
As de Blasio said, New York City, with 43 percent of the state's population, pays half the state's taxes — but isn't getting “commensurate funding.”
From 1985 to 2009, Stringer notes in a new “fair-share report,” Albany funded 19 percent of the city budget. Last year, it funded just 15 percent, a $2.8 billion shortfall.
This argument is an old one. Sen. Daniel Patrick Moynihan was saying four decades ago that Washington was “shortchanging” New York.
But it was a better argument back then. In the mid-'70s, wealthier people and businesses were fleeing New York, in part because of federal subsidies for mortgages that encouraged them to buy suburban homes. They left behind poor people who had fewer job opportunities — and the city was stuck supporting them.
But now the argument is so old it's obsolete.
First, “progressives” — like de Blasio — feel that rich people should pay their “fair share,” which means more than their share of the income.
Gee, Mr. Mayor: Your city is richer than the state and the country. The city's average wage was $80,474 in 2013 — a hefty 54 percent higher than the national average.
Part of that is bank bonuses. The average person in finance made $266,343 in 2013. But even without finance, the average city worker made $64,991.
And that, as Stringer notes, is partly because New York has done better than the rest of the country in attracting tech, advertising, media and other “information” jobs.
Sure, we've got more than our, um, fair share of poor people — our poverty rate is 20 percent, compared with 15 for the state and nation. But thanks to a booming tourist sector, we also have better job opportunities for these folk. That is why many of them are here.
And under a progressive tax structure, it's inevitable that people with well-paying jobs and other income wind up paying more in state and federal taxes.
A millionaire earner in New York state pays 8.82 percent in state tax, compared with 6.45 for a couple earning high five figures or low six figures. That “extra” money is supposed to go to the entire state, not just to us.
The same holds true on the national level — wealthier taxpayers pay 39.6 percent; poorer and middle-class folk pay 10 percent to 25 percent.
If de Blasio and Stringer want a dollar back for every dollar “we” put in, then, they should be advocating for lower income-tax rates for the rich.
That's the only way to achieve their “fairness” goal — unless the mayor and the comptroller think that the rest of the country shouldn't benefit from unfair Wall Street riches, and our better-than-average prosperity.
It would be different if the mayor and the comptroller were arguing that Albany should cut unfair state mandates — for example, the way it orders hefty pensions for city employees.
But on that front, the two politicos think everything is fine.
Stringer even noted in his own budget analysis that, thanks to a roaring stock market, the city doesn't have to put as much into the municipal pension funds — a savings that offsets more than half of the pay hikes awarded in de Blasio's new union contracts.
In reality, these union deals are unaffordable in the long term. That's especially true once a recession hits, as it inevitably will — and a stock-market decline obliges City Hall to sink much more into those pension funds.
The real problem isn't “unfairness,” but blithe spending.
As Stringer notes, city spending has shot up 4.7 percent a year over the last decade, more than double the inflation rate. (No, de Blasio wasn't mayor then — certain former mayors were fiscally reckless, too.)
The problem, as de Blasio and Stringer see it, is that state and federal spending on the city hasn't kept pace — rising by “only” 2.5 percent a year.
But we have no one to blame but ourselves if we want to take the state's perfectly adequate growth in spending and double it every year.
This piece originally appeared in New York Post
This piece originally appeared in New York Post