Fairness -- What a Concept

The Fiscal Policy Institute's James Parrott has a timely and spot on summary of New York's tax policy in the Times Union:

Gov. David Paterson's budget proposal shows that the top 5 percent of New York taxpayers had 59 percent of all income in the state in 2006. That's one and a half times the combined income of everyone else. However, if you put this together with the income numbers from 2002, and with the budget's projections for 2009, a curious picture emerges.

Even allowing for some slippage in high incomes in the recession, all of the income growth between 2002 and 2009 will go to the wealthiest 5 percent. The other 95 percent of households taken together will have about the same income this year as in 2002 (and that's without adjusting for inflation.) The incomes of the top 5 percent will have doubled over that period. That's a $200 billion income gain.

Now I'm not surprised that I've been treading water the last seven years. But I am surprised that the top 5% has seen a doubling of incomes overall. Now I'm sure that not everyone with a six-figure income has fared so well, but enough have to make the average staggering.

So what to do with New York's equally staggering deficit?

Asking the top 5 percent — or maybe just the top 3.5 percent with incomes over $250,000 — to pay a slightly higher rate on their state income taxes seems like a reasonable way to share the sacrifice that's being exacted by a damaged economy and a tighter budget.

It would also be a step in the direction of restoring fairness to New York's graduated income tax, which has become significantly less graduated over the years. Today, New York's middle- and lower-income households pay a higher share of their incomes in state and local taxes than the top 1 percent or top 5 percent.

Now there's a concept -- fairness. Now if only we heard such a word from more politicians. The whole op-ed is worth a read.