The tax proposals were announced as more than $100 billion is being doled out to New York in federal aid as part of the COVID-19 stimulus bill that was passed and signed into law by President Joe Biden last week.
The Democratic leaders of the Assembly, in a statement on March 14, said lawmakers are proposing a $208.3 billion budget for the coming fiscal year, including a 22.6 percent increase in spending over the previous fiscal year. It’s more than 10 percent higher than what Gov. Andrew Cuomo, a Democrat, is proposing, according to the New York Post.
Explaining that the CCP virus—which causes COVID-19—pandemic isn’t just a “health crisis” but an “economic crisis,” the office of Assembly Speaker Carl Heastie, a Democrat, said in a release that the extra funds are designed to “recover and restart New York’s economy,” adding that their plan “could make historic investments in health care, housing, education, higher education, and local governments, and includes funding for critical transportation projects.”
His proposal includes a graduated tax hike on millionaires, adding that the current income-tax rate for single filers who make more than $1 million and couples who make $2 million is 8.82 percent. The rate would rise to about 11.85 percent, Heastie’s office said.
New tax brackets would also be added, according to the speaker, for individuals earning between $5 million and $25 million and another bracket for people making more than $25 million per year. The latter would be hit with an 11.85 percent tax rate, while the former would be taxed at a 10.85 percent rate.
Lawmakers said the new taxes would generate $4.3 billion for the state.
More taxes include one on capital gains. Those earning more than $1 million per year would receive a 1 percent capital gains tax.
The proposal would also increase the estate-tax rate from 16 percent to 20 percent. Officials said it would rake in an estimated $130 million.
The proposal also would include a minimum business tax on corporate capital, a tax on “mezzanine debt and preferred equity investments,’’ and a new 18 percent “surcharge” on corporate franchises, utilities, and insurance companies. The NY Post noted that the surcharge could mean higher bills for customers.
Also proposed is a progressive state tax on those with pieds-a-terre, mansion townhomes, or similar homes used as a second New York City residence.
Republican Assembly Member Mary Beth Walsh told 6News that raising taxes could hurt the state more than help it.
“We have to ask ourselves what is the result of doing that. Are they going to decide to [move to] a more tax-friendly state?” she said.
EJ McMahon, fiscal analyst at the watchdog Empire Center for Public Policy, told the NY Post that “proposals would raise New York’s top state income tax rate to its highest statutory levels since 1979, when it was 12 percent.”
He then sounded the alarm: “Even if the final budget deal doesn’t include this whopper of a soak-the-rich hike, many in the targeted class could see it as a harbinger of things to come,” suggesting they might flee the state.