March 11, 2019

Cheating is Cheating

Some of you may remember that New York State is facing an unexpected budget deficit, to the tune of some $2.3 billion.

The shortfall is tied to lower-than-projected tax collections towards the end of last year, and in the first few weeks of this year, we were told - and that in part stems from the changes to the federal tax code that limited the deductibility of state and local taxes, or SALT, in the vernacular. Both Tom DiNapoli, the comptroller, and Andrew Cuomo, our Sonofa Gov, made that declaration when they told us about the problem.

Cuomo even went off to Washington to talk the president about doing something about the SALT limits, without success; if I remember correctly, each time Cuomo said SALT, Trump said abortion, so it wasn't a resounding success.

And even though things have been getting better, Cuomo told us, wealthy people are leaving New York to go to states where the tax situation is more palatable for them.  You know - states like Florida and others in the south and out west that don't have an income tax, and/or that have significantly lower property taxes.

Now, how many people really did that because of the changes in the tax code, vs. the people who age out of NY (the ones who are tired of dealing with winter and retire to warmer places, either fully or who live as snowbirds, we may never know.  But the state tax department is aggressively pursuing rich people who leave, to make sure they're really not New Yorkers anymore, and to make sure they're not cheating on their taxes. And that, of course, has people all riled up.

Here are a few of the headlines that brought this to our attention:
ESCAPE FROM NY: Tax Collectors 'Chasing' Rich New Yorkers Moving To Florida, Other Low-Tax States
Tax collectors chase rich New Yorkers moving to low-tax states. Auditors inspect cell records, even your dog's vet bills
New York gets aggressive chasing rich residents fleeing the state's high taxes to low-tax havens like Florida with invasive audits on dentist visits, vet bills and even refrigerator contents
The Rich Flee New York and Gov. Cuomo Sends the Tax Man After Them.
That last article is pretty funny - one the one hand, posing this question to NY Democrats:
Why do you think your citizens should get a write off of state and local taxes on the Federal ones? That is one of the dumbest and sneaky things you and other across the country have done to line your pockets.
But then, it tells us this:
"Tax the rich, tax the rich, tax the rich," Cuomo said last month. "We did. Now, God forbid, the rich leave."
OH, THE IRONY.
Driving out the rich and chasing them with the tax guy presents some long term problems both financially and from a P.R. standpoint... 
Oh, the irony, indeed. Having SALT deductibility is dumb and sneaky, but aggressively making sure that people are not cheating the rest of us is a PR problem?

Seriously, I'm surprised at how many people seem to think that making sure people are paying their fare share of taxes as specified in the tax code is a bad thing. Even if you think the tax code is full of crap, it's what we all have to deal with, whether we like it or not.

And I would think that we'd want people to be audited, as we have been doing for years, instead of letting them just skip away and leave the rest of us with a higher tax burden, which is what happens when people cheat.

I mean, there's no shortage of people across New York, across the dining room table, across the aisle at your church, or across the hall where you work, who think that everyone who gets any kind of public assistance, whether it's food assistance or heating assistance or income assistance or housing assistance, should be drug tested and income tested and their benefits should be limited because we can't have them living off of us for life, and don't even get me started on what food they can eat but let's just make sure it doesn't include lobster or steak, oh no sirree.

And let's not forget people who collect disability or workers comp, who need to be followed to make sure they don't accidentally start dancing in an elevator when their prom theme comes on as they're going to their doctor's office.

The fact that the state has recovered around a billion dollars in unpaid taxes from 2010 - 2017, or that more than half of the people audited lose their fight, or that the average amount recovered in recent audits is over $144,000 (more than twice the median income in NY) should give New Yorkers comfort that the state is aggressively going after cheaters, and that's exactly what it should be doing, even if the cheaters can afford lobster with their own damn money.

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