States find demanding higher taxes from the rich during fiscal crisis can be risky business

Risky business: States tax the rich at their peril

ALBANY, N.Y. — This year, New York’s deep-pocketed rich are being required to dig even deeper to help shore up state finances through new and higher income taxes.

They’re also being asked to pay higher taxes on limousines, yachts, real estate and for entering a horse in a race.

But halfway through the fiscal year, New York officials say revenues are falling short of even conservative projections as the recession drags on.

They worry the missing revenue can be blamed in part on the rich carrying out their threats to move to cheaper states.

A half-dozen states with similar measures and others considering them are nervously eyeing New York to see if it’s wise to demand so much from people rich enough to have a second home.