Wednesday, September 06, 2006

Spitzer's Tax Lies

WSJ Political Journal Report:

No Laffer

New York Attorney General Eliot Spitzer is expected to win next week's New York Democratic primary in a landslide and then crush Republican John Faso en route to capturing the governor's mansion in November. Surprisingly, the political prosecutor who terrorized Wall Street is now trying to run up the score by promising to cut property taxes as much as 80% for middle class New Yorkers and finance it with some $11 billion in budget cuts over the next three years.

The "sheriff of Wall Street" is doing his level best to sound like a supply-sider as he sews up votes in suburban and rural areas of the state. But New Yorkers might be unwise to put much faith in the promises Mr. Spitzer is spreading around in his quest for a landslide.

The proposal he laid out to a local mayors' conference in Saratoga included the predictable dose of class warfare. Residents can thank three-term GOP Gov. George Pataki, who -- in 1997 amid a blizzard of complaints about high property taxes -- created the crazy STAR system, which allows any resident to get a partial tax rebate as long as he or she remembers specifically to apply for it. Mr. Spitzer sees a problem here in "giving the same exact benefit to a homeowner regardless if he or she makes $5 million or $50,000." He wants to "fix it" by excluding high-income taxpayers -- another way of saying he wants to raise taxes on them -- while expanding rebates for middle-class taxpayers.

Meanwhile, his "budget cuts" would supposedly come by attacking the usual waste, fraud and abuse in New York's giant Medicaid system. There's plenty of all three, but Mr. Spitzer's coronation as the next governor was helped along by early support from labor unions that will brook no cuts in their gravy train. In next-door New Jersey, Democrat Jon Corzine also ran for office promising tax cuts, then immediately pronounced a "budget crisis" and demanded higher taxes. New Yorkers can see their own future just by gazing across the border.

-- Brendan Miniter