How spendaholic Kathy Hochul dooms New York to loser status

Across the nation, states are fiercely competing for companies and population by slashing taxes.

Gov. Kathy Hochul is dooming New York to be the loser.

In 2026, eight states are cutting their income taxes, and four others are reducing corporate tax rates.

South Carolina is pushing ahead on legislation to phase out its income tax entirely over the next few years, joining nine other income-tax-free states.

That’s bad news for New York.

Saddled with a spendaholic governor and Legislature, the Empire State is becoming increasingly unattractive to newcomers and businesses alike.

On Tuesday, Hochul unveiled a record-breaking $260 billion state budget plan — 2½ times the size of Florida’s, despite Florida’s larger population. 

She may not want you to notice, but her budget has a gaping hole: Spending exceeds predicted revenues by a staggering $27.5 billion through 2030.

What will plug that hole? 

Slap your face for saying the unmentionable: tax hikes. 

Hochul’s position on raising taxes is a red flag that New York state’s worst is yet to come.

She’s previously hinted at raising the corporate tax rate this year — perhaps the most damaging thing you can do to a state’s economy.

Her budget announcement didn’t go that far, but it did extend an existing corporate-tax surcharge for three more years, rather than letting it sunset as the law now requires. 

That means the Empire State still has the highest marginal corporate tax rate in the US, a mind-blowing 18.28%. 

Hochul says she won’t seek to raise personal income tax rates just yet — but doesn’t rule it out for next year.  

Yikes.

By some measures, New Yorkers already carry the nation’s heaviest tax burden.

Go ahead, governor. Drive in the knife and kill the state’s meager remaining prospects.

Hochul claimed last week that she’s laser-focused on “affordability”  — which she defines as a buffet of government handouts, paid for with tax dollars.

She believes the state’s tax structure is “working right now.” 

She’s got her head in the sand. 

Over the last decade, New York has suffered more population loss than every state but California — and job losses, too.

Why? High taxes.  

Millions of Americans fled the 10 states with the highest tax burdens in that time, while millions relocated to the 10 lowest-tax states.

New York ranks 50 out of 50, dead last in economic performance.

That’s not an act of nature, but the result of decisions by Hochul and other tax-addicted politicians.

New York doesn’t have to continue its decline. There’s a path out of this mess.

Since 2021, 27 states have adopted major tax cuts to increase their competitiveness and business appeal. 

Hochul should look around and see how other states are out-competing what was once the Empire State.

When people flee high-tax states, they take their money — and the state’s tax base — with them.

But cutting tax rates often yields a gradual increase in revenue, as taxpaying companies and workers move in. 

Mississippi’s ongoing income-tax phase-out is designed to take advantage of this well-documented economic phenomenon: It schedules another rate cut to kick in each time revenue increases by 5%. 

South Carolina will soon vote on an income-tax elimination bill that does the same.

That’s the path forward for New York and other tax-hell states.

Gov. Kim Reynolds of Iowa has shown how it can be done. 

When she took office in 2018, Iowa had one of the highest corporate tax rates in the nation at 12%; Reynolds reduced it in stages to 5.5%. 

She’s also brought personal income tax rates down gradually, from nearly 9% to a flat 3.8% this year.

Reynolds has also made Iowa the poster state for deregulation, with a rule that any regulation must be justified to the governor’s satisfaction — or it automatically sunsets after five years.

All of it has helped Iowa jump to No. 14 in the Chief Executive magazine ranking of the best states for business.   

No state is doomed to economic failure: A staggering 54% of corporate CEOs say they are “open to examining new locations” based on taxes, energy costs, regulation and workforce availability. 

“The competition to win over these CEOs has reached unprecedented levels,” reports Chief Executive.    

But New York is all but out of the running, ranking 49th  for business friendliness — keeping company with deep-blue states like Illinois,  New Jersey and California.

In her State of the State address last week, Hochul boasted about “building an economy that works for all.” 

Untrue. 

The figures don’t lie: New York is lagging way behind the rest of the nation.

“If you’re betting on the future, you need to bet on New York,” she said. 

Cut taxes, governor, and we’ll take that bet. 

Betsy McCaughey is a former lieutenant governor of New York.