Lawmakers weigh millionaire’s tax to raise revenue in budget talks

Democrats are pushing a plan to raise the state's income tax between 1-3% percent on people earning more than $1 million a year.

News 12 Staff

Mar 30, 2021, 8:02 PM

Updated 1,121 days ago

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To the average high-taxed New Yorker, the idea of a raising taxes on the wealthy may sound appealing. For many Democratic lawmakers in Albany, it is.
Under their proposal, that tax rate for joint filers with an income of $2 million would go from 8.82% to 9.85%. For incomes above $5 million annually, the rate would increase to 10.85%.
Families earning above $25 million would pay 11.85%.
Republican lawmakers oppose the idea.
“Taxing the rich sounds good, but the problem is, the rich leave,” says state Sen. Phil Boyle (R-Bay Shore).
He says increasing taxes on the wealthy often backfires because they can change their state of residency.
“New York has lost a tremendous amount of millionaires and billionaires in recent years. They simply move to Florida or some other state, live there for 6 months...and then we lose all of their income tax,” he says.
But Republicans are outnumbered roughly 2 to 1 in Albany. And the largest single bloc of lawmakers, city Democrats, strongly support the hikes.
Assembly Speaker Carl Heastie, of the Bronx, says, "What we're asking is for those who have done very well to do a little bit more."
Others argue the wealthy have done a lot. EJ McMahon, of the Albany-based Empire Center for Public Policy, says the “highest earning 1% generate 44% of all the taxes paid by state residents.”
“If the Legislature gets the tax increase it wants, I think we're going to hasten the erosion of our tax base and it won't be long before the Legislature turns to people who are not millionaires and billionaires,” he says.
There's roughly 20,000 people in Nassau, Suffolk and Westchester counties who earn above a million dollars. Rest assured, they will be paying close attention to what's happening in Albany before a budget is due on April 1.
The tax hikes would generate about $6 billion in revenue for the state. Opponents say with the billions New York got from the federal stimulus plan, it's money not needed right now.


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