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[Markets] New York Millionaires To Pay Highest Income Tax In The Country New York Millionaires To Pay Highest Income Tax In The Country

Vote woke, go broke.

After years of paying the highest income tax in the country, the privilege of being the most IRS-abused group shifts from virtue-signaling California 1%-ers to New York millionaires, who would pay the highest income tax in the United States under a new budget currently being finalized by embattled NY Governor Andrew Cuomo.

According to the WSJ, Cuomo and NY state lawmakers are nearing a budget agreement that would increase corporate and income taxes by $4.3 billion a year and would make top earners in New York City pay the highest combined local tax rate in the country.

Democratic leaders of the state Assembly and Senate briefed legislators on Saturday on the tax plan, which was one of the last pieces of a roughly $200 billion state budget, according to WSJ sources. The additional tax revenue would be used to increase school aid and create new funds for undocumented immigrants, small businesses and tenants who are behind on their rent.  In other words, New York's liberal rich elite about to be subsidizing illegals and deadbeats... just as it always dreamed of doing.

Legislators were briefed on a plan under which income-tax rates would rise to 9.65% from 8.82% for single filers reporting more than $1 million of income and joint filers reporting more than $2 million, the people said.

The plan would also add two new tax brackets. Income over $5 million would be taxed at 10.3% and income over $25 million would be taxed at 10.9%, the people said of the plan, and the new rates would expire in 2027.

Currently, New York City’s top income tax is 3.88%, which means the city’s millionaires would face a combined state and city income tax of between 13.5% and 14.8% under the new plan, pushing them to the highest combined income tax bracket in the US. California currently has the highest top income-tax rate, 13.3% on income over $1 million.

The budget would also increase New York’s corporate franchise tax to 7.25% from 6.5% through 2023, the people said. Previous legislative proposals to increase the estate tax and enact a 1% surcharge on capital gains aren’t part of the emerging budget deal, the people said.

Final drafts of budget bills are expected to be completed and voted on early this week, officials said. The state’s fiscal year began on April 1. Comptroller Tom DiNapoli, a Democrat, said last week that if a state budget isn’t adopted on Monday, about 39,000 state workers may have a delay in receiving their paychecks due this week.

Separately, NY lawmakers are also said to be close to an agreement on legalizing mobile sports betting in New York, which aides to Cuomo estimated could eventually raise as much as $500 million a year according to the WSJ. That move, as well as other programs, would bring the total amount of new revenue in the budget to roughly $5 billion.

The agreement would mark the first time that income taxes have increased during the tenure of Cuomo, a Democrat who took office in 2011. He has previously bragged that he decreased income and estate tax rates and restructured corporate taxes in prior budgets.

* * *

Business executives have warned that if excessive tax increases were adopted, residents who have been working remotely in other states would be reluctant to return to New York. The highest-earning 5% of tax filers account for 60% of what the state raises from income taxes.  Supporters of raising taxes have countered that higher rates won’t prompt migration, noting that the number of millionaires in New York went up after state lawmakers increased income taxes in 2009.

Republicans said last week that there was no need to raise taxes given an influx of federal aid. The federal government also approved a Covid-19 relief bill in March, which appropriated $12.6 billion of unrestricted aid to New York state in addition to billions more for education and healthcare programs. In January, Cuomo proposed a $1.5 billion income-tax increase as part of a plan to bridge a $15 billion deficit across the current and prior fiscal year. The state’s budgetary picture improved since then, with tax collections exceeding estimates. Cuomo’s initial proposal assumed the state would receive $6 billion spread across two fiscal years, and the governor said additional funds would obviate the need for tax hikes.

But Democrats who control the Assembly and Senate pushed for additional tax increases to generate recurring revenue that they said was needed for critical social-service programs. Their position is supported by unions and progressive organizing groups. Members of the party now have a two-thirds majority in each chamber, which is enough to override Mr. Cuomo’s veto.

State Sen. Jabari Brisport, a Democrat from Brooklyn, was one of several lawmakers who slept outside Cuomo’s Capitol office as part of a protest last week. Brisport said he believed Cuomo was an obstacle to increasing taxes on the wealthy. “We have to bring this physically to the governor, because he is wildly out of touch,” Brisport said Friday. Rich Azzopardi, a senior adviser to Mr. Cuomo, said that, “Lots of people sleep in this building this time of year” as they work on the budget.

* * *

This year’s budget talks unfolded as Cuomo faces pressure over accusations that he acted inappropriately in the workplace and investigations into his administration’s handling of Covid-19 in nursing homes. Cuomo has denied inappropriately touching anybody and has apologized if his workplace behavior made anybody uncomfortable. He has said the state is cooperating with a probe by federal prosecutors into nursing home policies as well as a state Assembly impeachment investigation looking at both matters.

Tyler Durden Mon, 04/05/2021 - 18:00
Published:4/5/2021 5:07:08 PM
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