Pity for N.Y. millionaires
If feds slam ’em, go easy here: pol
ALBANY — An across-theboard tax hike on millionaires sought by state Democrats will likely be off the table if President Trump’s tax bill passes in Washington, Assembly Speaker Carl Heastie told the Daily News.
In New Jersey, legislative Democratic leaders have said they will put the brakes on Gov.-elect Phil Murphy’s proposal to hike taxes on millionaires because they feel the increase — coupled with a federal bill that is expected to severely restrict the deductibility of state and local taxes — could force wealthy Garden State residents to decamp for lower-tax states.
“I do have that same concern (in New York),” Heastie (D-Bronx) said in an interview at his Capitol office. “It would be very difficult to ask those same people (who lose their federal deductions and could pay tens of thousand of more in taxes) to then pay an additional state income tax where that addition is not federally deductible.”
Heastie and the Assembly Democrats in recent years have argued the wealthy in New York should pay more of their fair share and have proposed a higher income tax rate for millionaires.
The Republican-controlled state Senate has consistently opposed the idea. But with the Democrats hoping to take control of the Senate in 2018 and the state facing a projected budget deficit of at least $4.4 billion, supporters of a millionaires’ tax saw improved chances of getting it passed.
The Republican congressional tax plan, however, is expected to severely reduce the deductibility of state and local taxes.
Heastie said he and his members will therefore likely forgo a push for an across-the-board millionaires’ tax. They would instead search for a “creative way” to ask wealthy people who may actually benefit from the corporate deductions in the federal tax bill to “be a little more helpful.”
“We’re going to have to do it, and I suggest New Jersey is going to have to do the same thing,” Heastie said.
One idea he floated was increasing taxes just on millionaires who draw their salaries through their corporations, which would see their tax rates drop from 39% to 20% thanks to what’s under discussion.
Creation of a mansion tax sought by Mayor de Blasio could also be on the table, he said.
Money raised from such taxes, Heastie said, could be used to help manage the projected deficit. The state also needs to come up with a long-term funding fix for the cash-strapped Metropolitan Transportation Authority.
He said his members as a group have yet to say whether they’d back a congestion pricing plan, something Gov. Cuomo is expected to propose, or would rather see a dedicated tax imposed on the rich to raise revenue for the transit system.
But Republican opposition, and Heastie’s concerns about raising taxes on the rich at the same time the federal bill could hurt them, would likely thwart the mayor’s mansion-levy idea.
Senate Majority Leader John Flanagan (R-Suffolk County) recently told The News that his Republican conference is against any hikes in taxes or fees.
While Heastie didn’t rule out all tax hikes, he did say he’s opposed to fee hikes, which he called regressive because they don’t take into consideration a person’s ability to pay.
Heastie last week said he fears the elimination of the deductibility of state and local taxes could reduce real estate values and plunge New York into a recession.