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March 29, 2007

Steve Forbes Will "Help Lead" Giuliani's Campaign

A little supply-side somethin'-somethin':

Republican ex-mayor of New York City Rudolph Giuliani won backing for his 2008 presidential bid from billionaire publisher Steve Forbes, who will also help lead his campaign, Giuliani's team said.


"Steve and I share an economic vision that embraces supply-side economics, tax relief, and spending restraint," Giuliani said in a statement released by his campaign team.

"As mayor of New York City, Rudy Giuliani showed how exercising fiscal discipline, including tax cuts, lowers deficits, spurs economic growth, and increases revenue," Forbes was quoted as saying in the statement.

"It is time the rest of the country benefit from a true fiscal conservative leader who gets real results."

Weighing against this is a New York Sun editorial knocking Giuliani for opposing a cut in the "commuter tax" levied on workers who work in, but do not live in, NYC.

John Podhertz notes it wasn't that simple.

And it wasn't. For one thing, Giuliani was mayor of New York City, not mayor of Jersey City or Greenwich, Connecticut. Between cutting taxes on New York City residents or residents of New Jersey, Connectucut, or up the Hudson New York, which do you think he favored?

For another, there's actually some justification for a commuter tax. Taxes are generally levied according to where one lives, rather than where one actually generates the income being taxed. So New York City suburbs could get fat on taxing income actually generated in New York City -- Giuliani (and pretty much every New York City politician) figured they ought to have a cut of that.

Finally, those who don't live in NYC, but are working there, do benefit from a lot of the services the city provides. Not all of them, of course, and not to the extent that a resident does, but it's not obviously unfair that a commuting NYC worker should pay a bit to the city, if only to keep up the surface roads he uses and pay the police and fire departments which protect him.

The tax was eventually repealed.

The result was an instant $200 million hole in the New York City budget. In effect, Albany was challenging Giuliani to raise taxes in New York City — on his own constituents — to make up for the shortfall it had caused to curry favor with voters in Rockland and Dutchess Counties. Giuliani reacted as any politician would react in such a situation. He got really mad, and did what little was in his power to do — which is to say, almost nothing — to get Albany to change its mind.

He concludes:

In short, the Giuliani opposition to the commuter-tax repeal tells you nothing about his view of taxation generally. As mayor, he did what he could to cut some of the most onerous taxes in the nation that had been imposed specifically by the City Council and previous mayors. His City Council wasn't all that high on doing a lot of it, but he muscled some of it through and that was more than anyone who preceded him had done.

It also tells you that given the choice between taxing people whose votes he relied upon and taxing people whose votes he didn't rely upon, he was more in favor of taxing the latter. Which is hardly revealing, now is it?

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posted by Ace at 02:53 PM

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