What You Need to Know
- The richest New York City residents would pay the highest combined state and city tax rates in the U.S., surpassing California.
- Under the proposed plan, income between $5 million and $25 million would be taxed at 10.3%.
- Also, income over $25 million would be taxed at 10.9%
New York Governor Andrew Cuomo and state lawmakers have reached a tentative agreement to raise taxes on the wealthiest New Yorkers as part of a roughly $200 billion state budget deal expected to be announced as early as Monday, according to a person familiar with the negotiations.
The richest New York City residents would pay the highest combined state and city tax rates in the U.S., surpassing California, and income-tax rates would temporarily increase to 9.65% from 8.82% for single filers earning more than $1 million, according to the person, who wasn’t authorized to speak publicly because a final budget hasn’t been reached.
The agreement would also create two new tax brackets. Under the proposed plan, income between $5 million and $25 million would be taxed at 10.3% and income over $25 million would be taxed at 10.9%. The new rates would expire in 2027 under the proposed plan.
Lawmakers were nearing a budget agreement that would increase corporate and income taxes by $4.3 billion a year with additional revenue going to fund aid for schools, undocumented immigrants and small businesses, the Wall Street Journal reported Sunday, citing unnamed sources.
The Cuomo administration and legislative leaders didn’t immediately respond to requests for comment.
Taxes have been one of the largest points of contention between the governor and the legislature. In his January budget proposal, Cuomo called for a $1.5 billion income tax increase.
But that was before the state knew how much money it would receive from a federal aid package. New York will receive only $12.6 billion of the $15 billion in federal aid it sought, leaving a hole of nearly $2.5 billion, budget director Robert Mujica said last week.