Millionaires in NYC set to face highest tax rate in US

The highestearning New Yorkers would face the nation’s steepest income tax rate under a budget lawmakers expected to vote on and pass Tuesday.

It would serve as a win for the Democratic party’s left wing, who say that millionaires in Manhattan penthouses have fared far better amid the pandemic then struggling small businesses and low-income New Yorkers.

States including California, Minnesota and Washington are also considering wealth taxes, raising taxes on capital gains or setting new top income tax rates. President Joe Biden — who said on the campaign trail he’d raise income taxes on high earners — has proposed tax hikes on wealthy individuals and families and a corporate tax rate increase to pay for his infrastructure plan.

Democrats in New York hope the tax increase could bring in at least $2.8 billion this upcoming year and prevent the need for spending cuts in years to come.

New York’s top income tax rate is currently 8.82% for income over roughly $1 million, while New York City residents face an additional 3.88% top tax rate.

New York is now set to raise the combined top tax rate for New York City millionaires above California’s top income tax rate of 13.3%.

New Yorkers who make over $1 million would face a 9.65% income tax rate. That increases to 10.3% for taxpayers who make between $5 million and $25 million, and 10.9% for those who make over $25 million.

“Working and middleclass taxpayers will receive the relief they desperately need, while the wealthiest New Yorkers will help their neighbors,” Stewart- Cousins said in a statement announcing that legislative leaders and Cuomo reached a budget deal Tuesday.

The exact language of the tax hike wasn’t available online until late Tuesday evening. New York was also set to raise the corporate tax rate from 6.5% to 7.25% for taxpayers with net incomes over $5 million. That move — along with a reinstatement of the capital base tax — would raise $750 million this upcoming year.

Democrats won control of the state Senate in 2018, but they gained more leverage last year by winning a veto-proof supermajority.