News

New York: Tax The Rich! (a little bit less)

Published

December 7, 2011

by Dave Zornow

Albany, Dec 7 — Depending on how you see things, the proposed replacement for New York State’s millionaire’s tax is a huge victory for income distribution and fairness, a giant flip-flop by the governor, or a chance for the really rich to get away without paying their fair share. But if you speak fluent Alban-yse, you’ll probably see it as a deal with something in it for everyone.

Here’s the short and simple version: the so-called “millionaires tax” will expire this year, replaced by a new scheme that increases the burden on people who make more than $2 million a year. The 4.4 million taxpayers who make between $40,000 and $300,000 a year will take home a little bit more of what they earned, as their tax rate will be a little bit lower.

And now for a few of the convoluting details:

The new plan will bring in an additional $1.9 billion in revenue for the cash-starved NYS treasury. However, if the “millionaire’s tax” had been extended, it would have brought in $4 billion.
You only needed to be 2/10 of a real millionaire to pay the old millionaire’s tax. The surcharge started with individuals making $200,000.
The $2 million a year crowd is still getting a tax break compared to what they are currently paying. The well-heeled, who used to pay 8.97 percent will only have to pay 8.82 under the revised plan.
The plan includes five new tax brackets: Less than $40,000, $40 – $150,000, $150 – $300,000, $300 – $2 million and $2 million and more.
Governor Cuomo’s inauguration speech last January included a promise, of ‘€œno new taxes, period.’€ This proposed plan, to be considered by legislators in a special session this week, could be considered both a tax cut and a new tax simultaneously. No doubt, Cuomo’s supporters and critics will see it both ways.
A joitn press release from the governor, Senate Majority Leader Dean Skelos and Assembly Speaker Sheldon Silver says the deal will also reduce the MTA payroll tax which Rockland, Orange, Westchester and nine other counties served by the MTA now pay. The Daily News reports businesses with payrolls less than $1.75 million will see some reduction in their MTA payroll taxes.
Businesses and counties impacted by Hurricane Irene and Tropical Storm Lee will see $50 million of additional flood relief.

Although New York’s super rich will get a greater tax spanking than the rest of us, there’s still one thing for which they can be grateful: they don’t live in California. The Golden State’s Governor Jerry Brown has proposed raising the tax rate for people who make $250,000 a year or more to 10.3 percent.

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