New York's new Mayor Bill de Blasio wants Central Park's horse-drawn carriages replaced by "tourist-friendly'' electric vehicles. Photo / AP
New York's new Mayor Bill de Blasio wants Central Park's horse-drawn carriages replaced by "tourist-friendly'' electric vehicles. Photo / AP
Bill de Blasio, New York's newly instated mayor, is heading into a political blizzard over his plans to tackle inequality by raising taxes on the very rich.
The 109th mayor used his inaugural speech last week to issue a liberal clarion call of the type not heard in New York - or arguably anywhere else in the US - for at least 20 years. As the first Democratic mayor to take office in the city since 1994, he vowed to take on what he has dubbed "the Tale of Two Cities" - the vast income gap that sets a sparkling and buoyant Manhattan apart from the grinding poverty found in the outer boroughs.
The pledge pits de Blasio, armed with an overwhelming electoral mandate from 73 per cent of New Yorkers, against the city's fiscally conservative establishment as well as the political leadership of Albany, the state capital, which holds sway over tax rates. How he emerges from what promises to be a bruising fight could determine the fate of his new mayoralty - and affect political debate across America.
"Bill de Blasio is strikingly out of step with the political agenda of New York for the past two decades - this is back to the future stuff," said Columbia university professor William Eimicke.
Eimicke puts de Blasio's chances of getting his tax plan through Albany at "slim to none".
The legislature and state Governor Andrew Cuomo both face re-election in November and, as Eimicke points out, a disproportionate percentage of their campaign funds are donated by New York City's nearly 400,000 millionaires.
Yet de Blasio, 52, is pushing his plan with the assertiveness of a politician who feels the force of history behind him, fuelled by welling anger among low- to middle-income Americans about the perceived injustice of a system that benefits "the 1 per cent".
In his speech, he ridiculed those who believe "that the way to move forward is to give more to the most fortunate".
Instead his Administration would focus on the "inequality crisis" facing a city in which the top 1 per cent earns 39 per cent of all income.
To confront the crisis, the new Mayor has proposed a package of radical policies, including affordable housing quotas for big developers and extending paid sick leave to 30,000 additional New Yorkers. But the most controversial element is to extract an extra US$530 million ($640 million) in taxes from those earning more than US$500,000 a year to pay for universal pre-kindergarten education and after-school programmes.
Anyone taking home up to US$1 million annually would have to pay US$973 a year on average in increased taxes.
Response to de Blasio's battlecry has so far been muted in the wake of his inaugural address. "I sense that a lot of people are pretty nervous about what the next few years are going to bring, but folk at the top are in a wait-and-see mode as they try to figure out whether the new mayor is prepared to work with them," said Scott Winship, a senior fellow at the conservative think-tank the Manhattan Institute.
Bill de Blasio's wife and children watch as he is sworn into office by former President Bill Clinton, left. Photo / AP
Critics of the tax plan were less restrained before de Blasio's inauguration. Hedge fund manager EE "Buzzy" Geduld said it was the "most absurd thing I've ever heard", while investment banker Peter Solomon said de Blasio was "barking up the wrong tree". Michael Bloomberg, de Blasio's billionaire predecessor, denounced the plan as "unfair" and said it would drive the rich out of the city.
On the other side of the battle stand figures such as progressive billionaire George Soros, who has called the plan "sound public policy".
The individual to watch in the pending storm is Cuomo, who has the power to veto any tax increase even should the legislature vote for it. He has promised to cut state tax rates in his own bid for re-election, and has so far been careful to keep his distance from de Blasio's progressive fiscal ideas. But the two men are friends - de Blasio used to work for Cuomo in Bill Clinton's Administration. Cuomo also has presidential ambitions and, as a savvy politician, knows when to bend with the prevailing wind.
"The media is going to play a key role here," said Eimicke. "If [they] portray this as a new wave in American politics, and De Blasio as a courageous man taking on inequality, they could create an oomph that will make other politicians afraid to oppose him."
De Blasio's blueprint
Increase taxes Under this keynote proposal, those earning more than US$500,000 ($604,000) a year would see their tax rate rise from 3.9 per cent to 4.4 per cent.
Affordable housing Service workers are being forced into the outer boroughs as rents and property values soar. De Blasio says he will make private developers include affordable housing in all their schemes.
Education De Blasio has vowed to stop the trend towards charter schools encouraged under former mayor Michael Bloomberg, and end the closing of failing schools. He wants to move away from test scores to grading schools and teachers.
Stop-and-frisk De Blasio made the surge in street searches of largely black and ethnic minority New Yorkers under Bloomberg a centrepiece of his campaign. His new police commissioner, Bill Bratton, has promised to curb the practice.
Central Park The new mayor says a high priority is removing "inhumane" horse carriages in Central Park. They will be replaced by "electric, vintage-replica, tourist-friendly vehicles".
