Progressive Taxation Better Than Defunding Government in Hard Times

New York state recently enacted tax increases on the wealthy creating two new tax brackets for those making over $300,000 and $500,000 a year. The state will raise $4 billion from the increases. While this is represents what the NYT describes as "signal of the new balance of power in Albany, where Democrats won control of both houses of the Legislature and the governor’s office in last year’s election" it is interesting that the democratic governor, accepted the plan after winning significant spending cuts in areas like health care and education.

So while this is a victory for those who have been dismayed by the rising inequality in this country over the last thirty years it doesn't necessarily represent a move on the state level to significantly reverse that trend.

New York is not alone though. Numerous states have looked to increased taxes on wealthy to meet budget shortfalls. With good reason. After thirty years more and more are fed up with the 'trickle down' myth. And there is more and more evidence that for the recovery. More on this later.

In Philadelphia folks are outraged that while most Philadelphians will face a double digit property tax increase the wealthy condo owners will continue to get a tax abatement.

This crisis offers an opportunity to restructure Philadelphias tax rate so it is more progressive. Some strategies include lobbying the state to be allowed to switch from a wage to income tax, increase the business privilege tax for large businesses while reducing it for small businesses, ending exemptions for law and banking institutions, creating homestead exemptions for owners facing rising property taxes, stop exempting non-city residents and businesses from doing business here, and ending the abatement.