For years, Cuomo resisted such a move, arguing that raising taxes, especially on the wealthy, would drive business out of state. But the coronavirus-related revenue shortfalls — combined with the growing strength of the Legislature’s progressive wing and the governor’s waning influence — created sudden momentum.
If enacted, the deal would raise income and corporate taxes to generate an extra $4.3 billion a year and would potentially legalize mobile sports betting to raise an additional $500 million in new tax revenue.
Under the proposed new tax rate, the city’s top earners could pay between 13.5% to 14.8% in state and city taxes, when combined with New York City’s top income tax rate of 3.88% — more than the top marginal income tax rate of 13.3% in California, currently the highest in the nation.
The question of who should pay to help revive the country, still recovering from the pandemic’s devastation of the economy, is percolating across the nation. In Washington, President Joe Biden has proposed 15 years of substantial increases in corporate taxes to help pay for an eight-year, $2 trillion package of infrastructure spending.
In New York, two new personal income tax brackets would be temporarily created: 10.3% for income between $5 million and $25 million, and 10.9% for income over $25 million, according to preliminary details obtained by The New York Times. The new rates would expire by the end of 2027.
The personal income tax rate would increase to 9.65% from 8.82% for individuals making over $1 million and joint filers making more than $2 million.
Raising taxes on the rich in New York has been a top policy priority of the Democratic Party’s left flank, but Cuomo, a fiscal centrist, had long opposed the move. Now, the governor’s influence over the budget — as well as other matters in Albany — has seemed to weaken amid various investigations into sexual harassment allegations and his handling of virus-related deaths involving the state’s nursing homes.