New York City Top Earners Face Highest Income Tax in U.S. Under Cuomo Proposal
By Jimmy Vielkind
ALBANY, N.Y. -- New York Gov. Andrew Cuomo proposed raising the
state's top income-tax rate by 2 percentage points, an increase
that would mean New York City residents in the top bracket would
pay the highest combined local tax rate in the country.
Mr. Cuomo, a Democrat, included the tax increase as part of a
$193 billion budget for the fiscal year that starts on April 1. He
said the increase would raise around $1.5 billion in tax revenue,
and would be coupled with operating cuts to cover a projected $15
billion deficit in the current and coming fiscal years.
New York's top income-tax rate would rise to 10.82% from 8.82%
under the proposal, state officials said. State officials said they
would create five new tax brackets that would last for three
The new surcharge would apply to all New Yorkers whose returns
report more than $5 million in income, and the top rate would apply
to income over $100 million. Currently, single filers pay an 8.82%
state tax rate on income over $1.08 million.
New York City's top income tax is 3.88%. That means some city
residents could face a combined state and city income tax of 14.7%
under Mr. Cuomo's proposal; California currently has the highest
top income-tax rate, 13.3% on income over $1 million.
Mr. Cuomo said he was concerned his move would prompt
high-income earners to leave the state, and said the tax proposal
could be avoided if the federal government approved a large amount
of aid to make up for revenue lost as a result of the coronavirus
"If the federal government doesn't fund state and local
governments, it's going to hurt all New Yorkers," Mr. Cuomo said
Tuesday. "The new government didn't cause the damage. But they are
legally, ethically and politically responsible for correcting
The governor said he was seeking $15 billion in aid from
Washington, which is the size of the state tax revenue shortfall
his office attributes to the pandemic. Mr. Cuomo also said he would
raise revenue by legalizing mobile sports betting and
President-elect Joe Biden on Thursday proposed a $1.9 trillion
coronavirus relief bill that sets aside $350 billion for state and
local governments. U.S. Sen. Chuck Schumer (D., N.Y.), who is
poised to become the chamber's majority leader, said in a statement
he was pleased with Mr. Biden's proposal.
Robert Mujica, Mr. Cuomo's budget director, said the state has
saved $6 billion in the current fiscal year by holding back part of
its planned payments to schools, local governments and
social-services providers. The delays could become permanent cuts.
The state has also saved $215 million by deferring pay increases
for state workers that had been scheduled to take effect in April,
Mr. Mujica said.
Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com
(END) Dow Jones Newswires
January 19, 2021 16:20 ET (21:20 GMT)
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