High-Earner Tax Rate Hike on Table in New York

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By Gerald B. Silverman

Wealthy New York taxpayers could be hit with a state income tax rate of more than 10 percent under a proposal released Jan. 26 by the Democratic Speaker of the Assembly.

The proposal, which hasn’t been drafted in the form of a bill yet, would raise the tax rate to 10.32 percent for those who earn more than $100 million a year and to 9.82 percent for those who earn between $10 million and $100 million.

The plan would also raise the rate to 9.32 percent for those who earn between $5 million and $10 million and to 8.82 percent for those who earn between $1 million and $5 million. About 66,000 taxpayers would be covered by the new rates.

The plan, which would raise $5.6 billion, is expected to form the basis of the Assembly’s bargaining position when it negotiates a fiscal year 2018 budget with Gov. Andrew M. Cuomo (D) and the Republicans who control the state Senate.

Resistance in Senate

The Assembly plan is likely to face stiff resistance in the Senate. It also goes far beyond a budget bill proposed by Cuomo to extend the state’s so-called millionaire’s tax.

“The millionaire tax should be allowed to sunset as scheduled and promised,” Zack Hutchins, a spokesman for the Business Council of New York State, told Bloomberg BNA in an e-mail.

“Instead of increasing taxes, the state should be looking at ways to improve the business climate and spur economic growth,” he said. “The Assembly’s plan will only encourage more people to leave New York and head to more tax-friendly states.”

Assembly Speaker Carl E. Heastie (D) said in a staement that “by ensuring that tax rates are tailored to expect more from those who can most afford it, we can make sure our communities have better schools, New Yorkers have better access to health care and that tax burdens do not crush those who are struggling to make ends meet.”

Scott Reif, a spokesman for Senate Majority Leader John J. Flanagan (R), told Bloomberg BNA that the senator and “members of our Republican conference are focused on cutting taxes and making New York more affordable for the middle class.”

Millionaire’s Tax Due to Expire

The “millionaire’s tax,” which sets a rate of 8.82 percent for singles earning more than $1 million and married couples earning more than $2.1 million, is scheduled to expire Dec. 31. The rate would then drop to 6.85 percent.

Tax rates for middle income taxpayers are also scheduled to be lowered after Dec. 31, and the Assembly plan would keep those middle-income tax cuts in place.

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y. at GSilverman@bna.com

To contact the editor responsible for this story: Ryan C. Tuck at rtuck@bna.com

For More Information

The Assembly announcement is available at http://nyassembly.gov/Press/20170126/

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