Martin O’Malley on fear of a millionaires' tax and the DREAM Act

martin-omalley-fear-millionaires-tax-and-dream-act
Gov. Martin O'Malley, at the New School. (Reid Pillifant)
Tweet Share on Facebook Share on Tumblr Print

Asked about Andrew Cuomo's concern that raising taxes on the city's highest earners might cause them to leave New York altogether, Maryland governor Martin O'Malley said, "We saw no evidence of that."

O'Malley raised taxes on Maryland's highest earners in 2007 and again in 2012. 

"People made those predictions in Maryland when we made our income tax more progressive: we asked the highest 15 percent of us to pay a little more and 85 percent of us paid less in terms of income tax," he said, in an interview following a panel discussion at the New School in Manhattan this morning.

At the event, O'Malley spoke broadly about the benefits of Bill de Blasio's proposal for universal pre-kindergarten, which would entail a tax hike that Cuomo has signaled would be a non-starter in Albany. 

MORE ON CAPITAL

ADVERTISEMENT

As governor, O'Malley temporarily increased the rate for top earners in 2007, which expired in 2010, and increased rates for Marylanders making more than $100,000 last year, in both cases to help fund education. 

"There were all sorts of dire warnings that there would be a great exodus of our highest earning citizens, but that hasn't happened," O'Malley said. "In fact, we had the highest number, I think, of millionaires per capita of most any state in the union and we did not see the predicted exodus."

(Some studies conducted by anti-tax groups have disagreed with O'Malley's assessment, arguing millionaires did depart the state as a result.)

In a meeting with the Daily News editorial board earlier this week, Cuomo expressed concerns that raising any taxes might drive New Yorkers to lower-taxed states like Florida.

O'Malley doubted that de Blasio's proposal, which would raise the marginal rate by four-tenths of a percent on those earning more than $500,000, in order to fund universal pre-kindergarten, was enough to move many millionaires.

"I hardly think that that would spark or spike an exodus," O'Malley said. "In fact, people across every business group says that pre-K is the smartest investment that we can make in terms of return on those dollars, and the avoidance of other dollars, than if the achievement gap were allowed to widen."

During his remarks, O'Malley also touted his state's DREAM Act, which allows for undocumented students to access in-state tuition and state financial aid. New York has allowed undocumented immigrant students to pay in-state tuition since 2002, but a state DREAM Act to allow access to state financial aid has been stalled in Albany, despite pressure from Democrats. Cuomo has not made that state DREAM Act a priority, and has said the onus for immigration reform rests with the federal government.

"Well, we are limited in what we can do, and we do need federal immigration reform," O'Malley said, when I asked him about it this morning. "But I do believe that when states adopt policies of inclusion that that sends a message way beyond the single issue itself: When you make it easier for people to vote, rather than harder. When you make it more possible, not less possible, for people to send their children to college. When you reduce achievement gaps, when you surpass goals for women and minority business inclusion."

He said the state's inclusive policies have helped spur entrepreneurship.

"Policies of inclusion are good for the economy," he said.