Governor Cuomo and the state of New York are proposing a state budget plan to meet the deficit by increasing taxes. The Wall Street Journal has reported that the spending plan envisages an increase in corporate and income taxes that will provide revenue of $4.3 billion a year.
The so called “millionaire tax” would have the following rates:
- Individuals who make more than 1 million or couples who make more than 2 million a year will see a hike from 8.82 percent to 9.65 percent
- Anyone earning more than 5 million a year will have to pay a rate of 10.3 percent
- Anyone earning above 25 million will have to pay 10.9 percent
- Corporate tax rates would increase from 6.5 percent to 7.25 percent through 2023
City taxes in New York are 3.88 percent. Combining the city and state local taxes could result in a tax rate of up to 14.8 percent for New York’s wealthy residents.
State legislators have been debating the taxation proposals at Albany from a few days and took a break on Easter Sunday. Negotiations and discussions will resume today and has to be passed by the end of the day. The budget is overdue and 40,000 employees need to be paid by this week.
The state has an estimated deficit of about $15 billion. The New York state government received $12.5 billion from the $1.9 trillion Covid Relief Package passed by the Biden administration. New York City received $6.1 billion.
Senate Majority Leader Chuck Schumer had said that he had done everything that was possible to get a fair deal for New York which is his home state. He felt that the stimulus package of $12.5 was sufficient and state taxes were unnecessary but Governor Andrew Cuomo said that the 12.5 billion dollars “is very, very helpful.” In his opinion they need $15 billion and hence the taxes have to be increased.
The top 1-2% of the wealthiest New Yorkers are said to contribute almost half of the state’s personal income tax.