New York state lawmakers are close to striking a new budget deal that includes a “wealth tax” that would boost the tax bill for the state’s richest residents, especially those who live in New York City.
How much more will the rich pay? According to The New York Times, he plan calls for two temporary tax brackets, set to expire at the end of 2027, 10.3 percent for income between $5 million and $25 million, and 10.9 percent for income over $25 million. The personal income tax rate would jump to 9.65 percent from 8.82 percent for people who make $1 million and for joint filers who make more than $2 million.
Manhattan’s mega-rich would take the biggest hit to the wallet. If the higher tax rate is approved, the wealthiest people in the city could pay between 13.5 and 14.8% in combined taxes (NYC’s top tax rate is 3.88%). For comparison’s sake, the top marginal tax rate in the country right now is in California, at 13.3 percent.
The state’s massive shortfall due to the impact of the pandemic is a major reason why this deal is so close to happening. Calling on the wealthy to pay a larger share of the nation’s economic recovery has led to similar “wealth tax” proposals being considered in California as well as Minnesota. President Biden’s infrastructure package relies on corporate tax hikes for much of its funding, and he’s likely to call for tax increases on America’s 1% as well.
Governor Andrew Cuomo has long opposed raising taxes on his state’s top-earners, saying doing so would force them to move elsewhere and take their tax dollars with them. But the governor’s influence over an increasingly-progressive legislature is not what it once was. The sexual harassment investigation against him has cost him a lot of political allies. Cuomo, a middle-of-the-road Democrat, found himself in the awkward position of holding budget negotiations with fellow Dems whose support he had lost.
One other key aspect of the budget bill being worked on is the allocation of three full-scale casino licenses. If that gets approved, it almost certainly would lead to a casino in New York City.