In addition, New York City may not remain on top for long. High-wage earners will still pay a lesser, combined all-in rate of 44% on income below $1 million. That's about the population of Armonk, the wealthy New York City suburb that is home to IBM headquarters.Īnd remember: That 52% surcharge is a marginal rate paid on the income above $25 million. And only about 4,000 of those people made more than $5 million. Nearly 3 million New York City residents file taxes, according to state data from 2018, but just 30,000 reported making more than $1 million a year. That would push New York past California, which currently has the highest marginal personal tax rate of just over 50% on income over $1 million.įew of Gotham's wealthiest, however, will end up paying rates that high. The increases combined with New York City's own 3.9% tax on personal income, as well as federal income tax rates that range from 10% to 37%, will raise the top marginal personal tax rate for city residents to nearly 52%. It will also create new tax brackets for income above $5 million and $25 million a year, with even higher rates of 10.3% and 10.9%, respectively. New York's income tax rate for annual earnings above $1 million will rise to 9.65%, from its current 8.82%, under the latest deal. "This budget will give us the resources to do all of those things, and I'm running for mayor to see them through and lead our city's greatest comeback." Reality check: Few will really pay more than 50% "That's what New York's value proposition is all about, not fractions of a point on income tax rates," Stringer said. He told CBS MoneyWatch the city's public sector assets - "great schools, safe streets, world-class parks"- and its diversity would continue to outweigh for most people and businesses the cost of higher personal income taxes. New York City Comptroller Scott Stringer, who is also a candidate in the Democratic primary for mayor, supports his state's tax increase. "State revenue losses as a result of the pandemic have varied from far-less-than-expected to non-existent," said Adam Schuster, senior director of budget and tax at the Illinois Policy Institute. The also must adapt to changes under Donald Trump's 2017 signature tax-cut law that effectively eliminated personal deductions of state and local taxes on federal income taxes by wealthier residents of New York and similarly high-tax states like Connecticut, California, Illinois and New Jersey.Ĭritics of the hikes also contend that any damage done to New York or other states and cities by the pandemic has been more than made up for by the billions in federal stimulus money being distributing to states. The bite comes as both New York City and state replenish their public coffers amid the pandemic. The higher tax rates will apply to all state residents making more than $1 million, but the city's own local levies will make the Big Apple the highest tax locale in the country. The tax hike for millionaires still must pass the state legislature's lower house and be signed into law by Governor Andrew Cuomo, both of which now seem likely to happen. New York's state senate on Tuesday passed a deal to raise the income taxes collected on those with annual earnings above $1 million. That means - in theory, at least - that some of the city's wealthiest residents could end up giving more of their paychecks to federal, state and local governments than they keep for themselves. New York City's ultra-high earners will soon have to pay a top marginal income tax rate of nearly 52%, the highest personal income tax hit in the U.S. Biden backs corporate tax hike to fund infrastructure 13:58
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