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Cuomo Strikes Deal to Raise Taxes on the Wealthiest

Tuesday, 06 December 2011 09:43 By Thomas Kaplan, The New York Times News Service | Report

Albany - Gov. Andrew M. Cuomo and legislative leaders on Tuesday announced that they had reached an agreement to raise taxes on New York State’s wealthiest residents as part of a deal to overhaul the tax rates.

The leaders, seeking simultaneously to make the state’s income tax system more progressive and to increase tax collections during a down economy, announced their agreement as lawmakers began to arrive at the Capitol for an expected special session of the Legislature later this week.

The tentative agreement would not only raise taxes for the wealthy, but also cut taxes for the middle class, by creating four new tax brackets and tax rates. The officials said the tax rate changes would generate $1.9 billion in annual revenue for the state.

“This would be lowest tax rate for middle class families in 58 years,” Mr. Cuomo said in a statement. “This job-creating economic plan defies the political gridlock that has paralyzed Washington and shows that we can make government work for the people of this state once again.”

The state’s current income tax rates are relatively flat, taxing any individuals who earn $20,000 or more, as well as couples who earn $40,000 or more and file joint tax returns, at the same 6.85 percent rate.

For the last three years, individuals who earned more than $200,000 a year, and couples who earned more than $300,000, have also been subjected to a tax surcharge called a “millionaires’ tax.”

Under the proposal announced Tuesday, for married couples filing jointly, income from $40,000 to $150,000 would be taxed at 6.45 percent; from $150,000 to $300,000 at 6.65 percent; from $300,000 to $2 million at 6.85 percent, and over $2 million at 8.82 percent.

Changing the tax rates and brackets would allow the state to replace some, but not all, of the revenue to be lost when the so-called millionaires’ tax expires on Dec. 31.

Any increase in tax rates for the wealthy would mark a reversal for Mr. Cuomo, a Democrat, who ran for governor last year on a platform of opposing tax increases and said that increasing such taxes would hurt the state by motivating wealthy residents to move elsewhere.

But Mr. Cuomo has come under increasing pressure from Democrats and labor unions in recent weeks as the sluggish economy weakened the state’s financial picture, widening next year’s projected state budget gap to as much as $3.5 billion, and as the Occupy Wall Street movement directed more attention to the issue of income inequality.


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Cuomo Strikes Deal to Raise Taxes on the Wealthiest

Tuesday, 06 December 2011 09:43 By Thomas Kaplan, The New York Times News Service | Report

Albany - Gov. Andrew M. Cuomo and legislative leaders on Tuesday announced that they had reached an agreement to raise taxes on New York State’s wealthiest residents as part of a deal to overhaul the tax rates.

The leaders, seeking simultaneously to make the state’s income tax system more progressive and to increase tax collections during a down economy, announced their agreement as lawmakers began to arrive at the Capitol for an expected special session of the Legislature later this week.

The tentative agreement would not only raise taxes for the wealthy, but also cut taxes for the middle class, by creating four new tax brackets and tax rates. The officials said the tax rate changes would generate $1.9 billion in annual revenue for the state.

“This would be lowest tax rate for middle class families in 58 years,” Mr. Cuomo said in a statement. “This job-creating economic plan defies the political gridlock that has paralyzed Washington and shows that we can make government work for the people of this state once again.”

The state’s current income tax rates are relatively flat, taxing any individuals who earn $20,000 or more, as well as couples who earn $40,000 or more and file joint tax returns, at the same 6.85 percent rate.

For the last three years, individuals who earned more than $200,000 a year, and couples who earned more than $300,000, have also been subjected to a tax surcharge called a “millionaires’ tax.”

Under the proposal announced Tuesday, for married couples filing jointly, income from $40,000 to $150,000 would be taxed at 6.45 percent; from $150,000 to $300,000 at 6.65 percent; from $300,000 to $2 million at 6.85 percent, and over $2 million at 8.82 percent.

Changing the tax rates and brackets would allow the state to replace some, but not all, of the revenue to be lost when the so-called millionaires’ tax expires on Dec. 31.

Any increase in tax rates for the wealthy would mark a reversal for Mr. Cuomo, a Democrat, who ran for governor last year on a platform of opposing tax increases and said that increasing such taxes would hurt the state by motivating wealthy residents to move elsewhere.

But Mr. Cuomo has come under increasing pressure from Democrats and labor unions in recent weeks as the sluggish economy weakened the state’s financial picture, widening next year’s projected state budget gap to as much as $3.5 billion, and as the Occupy Wall Street movement directed more attention to the issue of income inequality.


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